With $193 per head losses in the cattle market, it’s tough to call it an improvement, But compared to last week’s losses of $248, according to Sterling Beef Profit Tracker, the $55 gain helps ease the pain.
On U.S. Farm Report, Matt Bennett of Bennett Consulting told host Tyne Morgan he thought cattle were oversold, and the beef industry won’t see strong cattle prices for a little while longer.
“There could be more weakness down the road,” said Bennett. “I think for the time being, we overdone it enough to where we could see a little bit of a bounce.”
On the other hand, Don Roose of U.S. Commodities said there’s a short-term “good seasonal low,” but there’s still a lot of supplies to consider in the fourth quarter.
“With the supplies of protein we have coming at us in the fourth quarter, those will probably catch up risk management opportunities, even in the second and third quarter,” said Roose.
With the start of a new year less than 9 weeks away, Bennett believes producers will have to consider what the upside is in the market, encouraging them to keep floors under the prices they have.
The hog market isn’t in the best shape either. One thing hurting prices is the lack of slaughter capacity. According to Roose, slaughter rates are between 6 to 8 percent. Prices could improve if rates were scaled back to a government estimate between 2 to 4 percent.
Farmers are hoping things won’t revert to the hog market of 1998, but Roose is optimistic it won’t happen again.
“I think what happened is we got too negative too early and we are finding a dead cat bounce right now,” said Roose.
Watch Bennett and Roose discuss livestock markets, China’s impact in U.S. pork, and the soybean rally on U.S. Farm Report above.