Could Chicago's Proof of Vaccination for Indoor Dining be Bullish for Cattle and Hog Prices?
Livestock Markets 2022 122321
Concerns over the Omicron COVID-19 variant headlined news last week. As analysts debate what it could continue to mean for commodity markets, Bob Utterback of Utterback Marketing and Mark Gold of StoneX Group both say they are friendly on cattle and hog prices into the New Year, despite continued COVID-19 concerns.
"I am friendly on cattle prices for two reasons," Utterback said on AgDay. "I don't think we've seen a major expansion. The second is, I don't think the virus or the impact on the domestic economy will be as bad and lockdowns won't be as bad as we previously saw. So we'll get back to school systems opening up."
Utterback says the big issue will be the packing industry.
"Will there be any political action against the packing industry to break the industry up and try to pass more of the profit margins from the producer to the consumer, to take some of the profit margin away from the packers? I think that's the big uncertainty for the meat industry looking forward," says Utterback. "But overall, I think prices are in an uptrend."
Gold agrees demand could provide continued support in the cattle complex, but cautions the COVID-19 variants will be something the markets will closely watch.
"The best we can tell now, and we're hopeful of this, is that it peaks in the first three or four weeks and then backs off very quickly," says Gold. "So hopefully, that won't have too much of an impact on the retail demand and beef restaurants will be open."
Just this week, the city of Chicago announced anyone entering certain indoor facilities, including dining, will have to provide proof of vaccination. Gold says that's also something to watch.
"In Chicago, they just passed an ordinance saying that if you're going into a restaurant or a bar, you've got to have proof of vaccination. And I think those kind of moves, whether you like them or not, will certainly help the cattle industry by keeping the restaurants open and moving."
Both Gold and Utterback say with cattle prices today, they think protecting prices will pay in 2022.
"I would not want to be selling the board. I think if we break out of these overhead resistance levels, that could be quite bullish for cattle and hogs in the near term. It's the same old thing, though, if concerns about Taiwan and Russia are revealed, trade sanctions would go in place. The market would be in a tizzy and the downward spikes in the market could be significant," Utterback says.
