Economist says the cattle market is shifting, and not in a positive direction
In recent weeks, the cattle industry has seen corn prices skyrocket and cattle prices start to drop.
Scott Brown is a livestock economist with the University of Missouri. “For me if I’m a cow/calf producer looking to figure out what to do with my feeder cattle ready to come to auction this fall, I have less risk management options available as these feeder cattle markets have struggled in the face of higher feed costs,” he says.
He tells Brownfield rising input costs are narrowing margins for all sectors of the industry. “A ten-cent increase in is going to get us about an eighty-cent decrease in feeder cattle prices,” he says. “Just to make that feedyard break even for that added cost of gain.”
Brown says with rising feed costs and other challenges facing cattle producers there is very little incentive to grow the herd. “And you add the related dry weather in many parts of cow/calf country that are making pastures problematic for folks,” he says. “I don’t see much on the other hand that says we’re going to grow cow inventory anytime soon.”