The cattle market has been on a downward trend in recent weeks. Livestock Marketing Information Center (LMIC) Director Jim Robb said in terms of the slaughter market, he thinks the market has reached its bottom for 2015.
“I think it’s on the fed cattle side, we kind of groped through a bottoming process here over the last couple of weeks in the fed cattle, seems like we put that in, probably gravitate slowly higher toward the fourth quarter this year,” Robb said. “A little bit still topsy turvy, we don’t have a lot cattle moving between the feedlots and the packers, but seems like we’re setting up a bit of foundation to move the market a little bit higher.”
Radio Oklahoma Network Farm Director Ron Hays caught up with Jim Robb at the Southern Plains Beef Symposium held Saturday in Ardmore, Oklahoma. Click or tap on the LISTENBAR below to listen to this Beef Buzz feature.
As herd expansion gets underway in the United States, fewer cows and calves are being sold through auction barns. That has also translated over the fat cattle market, where it has become harder to establish a market with fewer cattle sold.
“We have overall rather tight supplies in feedlots and then we have a thinning market in terms of cash trade, especially in the Southern Plains,” Robb said. “So it’s a little harder to get your arms around the market. Wholesale beef market has been pretty well established, although it’s been softer.”
One area that has been weak, has been demand for non-meat carcass items. This includes items such as hides and internal organs like tongue and liver, which are predominately exported. With lower demand, Robb said that has put a drag on the market.
“That’s taken three dollars to five dollars a hundred weight off the live cattle market compared to a year ago,” Robb said. “So, that’s one of those subtle aspects we usually don’t talk about, but has been a bit of drag. It’s not so much been the meat market drag, it’s been the byproduct drag from a fed cattle perspective.”
The biggest value comes from the hide and lower demand has created surplus supplies. Robb said right now there are hides in storage across the U.S. Demand for items like handbags and leather goods remain relatively soft. Robb said the whole international dynamic remains very weak with Europe, Japan, and Russia all in recession. While the U.S. is a bright spot in the global economy, Robb said this strength needs to reverberate through the international marketplace.
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