Recent reports from USDA on the cattle inventory and cattle on feed have shown that herd numbers have continued to be on the rise. Cattle on feed has especially been on an upward trend with record numbers for the most recent July report.
Despite those record numbers Chip Nellinger of Blue Reef Agri-Marketing, Inc. says they didn’t exceed pre-report analysis.
“That’s a good sign, especially considering we’re screaming into the third quarter. By winter and spring those numbers should tighten back up we’ll have better things ahead of us,” Nellinger believes.
Cattle are still trading at $110-112/cwt in the cash market which is a positive indicator considering the flood of cattle in feedlots.
One area of concern however is the drop in hog prices.
Nellinger thinks pork exports will play an important factor in what happens with hog prices going forward. If hog prices continue on a downward trend it could spill into the beef market.
“It’s not going to be overnight, it’s going to be gradual,” Nellinger says of negative hog prices causing disruption for cattle. “By the time it’s an issue, maybe these cattle numbers will be shrinking in the winter to offset it.”
Despite cattle prices being lower than year-ago levels, of the major livestock markets beef has weathered the storm better than poultry or pork.
For more on cattle markets watch Nellinger’s interview with AgDay in the video above.