After a rocky start to the week, markets appear to have stabilized for now. However, analysts say it is a good reminder not to make any knee-jerk reactions, and that is especially true in the cattle markets.
Analysts with DTN say days like earlier this week can be daunting, especially when fundamentals do not seem to be making much sense. Keeping a level head is important, warning chaos can spread quickly, so considering all options is usually the safest bet. That will be important in the coming year, with cattle inventory projections looking to come in lower.
Livestock analysts say despite the loss of the July report, other clues are available.
“Modeling estimates the July 1st U.S. cattle inventory to be 94.2 million head or about 1.2% lower than in July 2023. Hence, it appears the U.S. cattle industry overall remains in a contractionary phase, even if there may be regional pockets of expansion,” said Jason Franken.
The Farm Bureau also crunched the numbers, and they show cattle and beef prices are expected to remain strong, largely because of shrinking cattle supplies and strong beef demand. While profitability is not an issue right now, there are concerns that production costs and a sluggish ag economy could become problems.
