Call the Market

It's been roughly three weeks since news first began to spread that dairy cattle were becoming ill in parts of Texas and Oklahoma, which quickly caught the attention of beef producers. The illness is currently named Highly Pathogenic Avian Influenza (HPAI) or bird flu even in cattle, but the American Association of Bovine Practitioners (AABP) is recommending a new name for the illness that made dairy cows sick in several states: AABP wants it called Bovine Influenza A Virus (BIAV).

AABP believes the illness should be addressed in this manner as the symptoms in the dairy cattle are different than that of avian influenza. DTN's Senior Livestock Editor Jennifer Carrico wrote about the matter which you can access here: https://www.dtnpf.com/….

Regardless of what the illness is called, officials have seemed to conclude that the virus thankfully poses no threat to humans through meat or milk consumption. As DTN has reported earlier, milk from sick cows is not permitted to be shipped for consumption, and pasteurization inactivates bacteria and viruses. (See https://www.dtnpf.com/…)

And while this news comes as a deep sigh of relief, one can't help but be discouraged when they see there's been the stark sell-off in both the live cattle and feeder cattle markets.

Right when the market was in the middle of what seemed to be a strong early spring rally, fear and nervousness stole the cattle complex's thunder even though no beef cattle have the illness, no dairy cows have died from being affected by the illness, and no dairy herds have been depopulated. (See https://www.dtnpf.com/…)

What's even more painful to understand about the cattle complex, which is evident by last fall's deterioration and the price swing endured here as of late, is that the market will plummet $5 to $6 without even batting an eye on one single day, but gaining the same type of position could take weeks.

But, thankfully, given the market's closes early this week, it seems as though traders are ready to put their fear regarding the flu behind them. I would hate to jinx our luck and see the market turn lower again this week, but it does seem as though the market has turned a new page and it's ready to refocus on its fundamentals.

The market could be hard-pressed to receive the fundamental support it desires, given that packers have been able to back up showlists, and that boxed beef prices have been under slight pressure. But the more days that pass without any new scares of illness are helpful to the market. At this point, no news is good news -- the market will eventually begin to find its strong points and again focus on those factors.

If you're feeling discouraged with the market, I encourage you to look at current cull bull and cow prices -- that will add some pep to your step. The futures complex may have fallen, but fundamentally, we are still short supply and demand remains strong. It will likely take the futures complex some time to regain its focus, but those fundamentals facts haven't changed.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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