Although some might argue cattle prices are headed lower because of market cycles, Matt Bennett of Bennett Consulting disagrees.
“There are a lot of reasons why it’s going to be tough to kill this cattle market,” Bennett tells the “AgDay” Agribusiness Update segment. “[Producers] are not going to be selling heifers or moving them into the feedlot like they were last year. They’re going to be holding them. I think we’re going to be building the herd moreso than what we were last year.”
So far, cow-calf producers have experienced particularly positive financials relative to feeders.
“The cow-calf guys, it didn’t really matter what they did, whether they were feeding them, whether they were selling them,” Bennett explains. “They’re making more money than what we have in quite some time. It’s been a nice time to have cattle as property.”
For 2016, Bennett doesn’t think producers will build cattle inventories fast enough to bring prices down. Nonetheless, he says, each operation needs a risk management plan in place.
“I think we’re still going to be exporting a fair amount of beef,” Bennett says. “The bottom line, in my opinion, on this is that we can count on this being fairly good for a while, but I still would like to see guys that are fairly heavy into the cattle business managing their risk. As you know, it will turn probably before any of us are expecting it. But I do think it’s going to take a fair amount of better numbers than what we’re going to see in the next six to 12 months before that happens.