Cattle Market Shock Nearly Over, Experts Say

The downward spiral from the late 2014 and early 2015 record-high cattle prices has been tough for many in the business, but CattleFax CEO Randy Blach said the steepest portion of the market correction has passed.

He explained to beef producers at the CattleFax Outlook Session held during the 2016 Cattle Industry Convention and NCBA Trade Show that tighter protein supplies and stronger exports created the ‘perfect storm’ for the cattle market to reach the extreme highs.

“We are coming off historic highs in the cattle market, created by unique conditions in both the global and domestic protein markets,” said Mr Blach.

“Dynamics, specifically larger protein supplies, led to a significant correction in price in 2015. A large portion of the market down trend is over now. However, the cycle shows prices continuing to trend lower in 2016, 2017 and 2018.” – Click here to read more.

In weather news, the drought-stricken summer rainfall area of South Africa has seen some rain, but prospects nevertheless remain bleak that the region will break out of the grip of the drought this season, Glenneis Kriel reported for TheCattleSite.

Gerhard Schutte, CEO of the Red Meat Producers Organisation (RPO) confirmed that there has been relief in many of the provinces, but the situation is still critical in the central parts of the country.

“The rain should be seen in perspective. The country has already lost more than three months worth of pastures, so the situation won’t be salvaged even if we had widespread precipitation now.

"Grazing and crop residues will remain limited in the summer rainfall areas, with the situation worsening over winter. We therefore expect emergency culling to continue until June July,” he said.

Mr Schutte predicted that prices for red meat will move sideways until the winter is over and that the price of beef will then increase by 10 per cent and for mutton by 12 per cent towards the end of the year. He also predicted that prices will increase above inflation in 2017 - read more.