Cattle prices remain high, but producers are urged to be prepared for when they inevitably fall.
Brian Perillat, an agribusiness specialist with More Than Just Feed who specializes in cattle markets, told the recent Saskatchewan Beef Industry Conference that the futures market remains in an upward trend, but maintaining it will be hard as volatility continues.
“Getting over the next hump could be a challenge, so we’ve got to be prepared,” he said.
Ryan Copithorne, president and founder of Cows in Control, highlighted the 10-year cattle cycle, which usually consists of five years of price escalation, followed by five years of decline.
Currently, the market is entering its sixth year of escalation, so the drop in the market could happen at any time.
Historically, Copithorne said the pullback in the cycle usually involved a 40 to 50 per cent price drop, though he anticipates a gradual sell-off this time rather than a sharp decline.
“It’s not always a perfect five and five, but it’s pretty close, so we’re going into our sixth year now in this rally,” he said.
“At some point, we’ve got to expect this thing’s going to start to roll over. Does that mean it has to sell off hard, like last time? No, I think it can actually gradually sell off. But we’ll see. We’ll let the market dictate that.”
Perillat said looking at the futures market is an important way to keep track of what the market is going to do because the cattle market usually matches the futures market.
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