Market recovery from coronavirus impact could be lengthy
The coronavirus outbreak has left cattle producers in the thick of one of the worst market meltdowns in recent history and an ag economist says some producers are left trying to figure out how to get through it.
Oklahoma State University’s Derrell Peel says, “from this point forward we’re obviously in defensive mode.” “Some producers are caught – you know, cattle are perishable, essentially, much like meat,” he says. “And we may not have any choice but to market cattle and some cattle in the worst of this.”
He tells Brownfield other than a sporadic bounce, a rebound in the market isn’t likely — yet. “The market is still trying to figure out what the worst-case scenario is,” he says. “We may be there, we may have even gone past it, which would be typical at least on the futures side. But we really don’t know where that is yet. I think we’re a few weeks – or a couple of weeks away from knowing where that is.”
However, Peel says there is some light at the end of the tunnel. “At some point in time there is still global demand for protein and that offers opportunities for US meat sectors,” he says.
He says producers shouldn’t be making dramatic changes to their production or marketing plans just yet, but it isn’t a bad idea to start thinking about how to make adjustments if the market situation doesn’t begin to stabilize in the near future.
AUDIO: Derrell Peel, Oklahoma State University