The cattle market has taken a brutal beating over the last two months. Both live cattle and feeder cattle contacts have reached new lows, and yet the market continues to drop even lower. I could spend this time writing about the various pieces of the market that are looming lower, but we have spent enough time going over those matters. It's about time that we talk about the bright spot still out there for the cattle market. Keep in mind two factors in the midst of the market's panic: 1) beef demand is still strong, 2) what goes down, must come up.
As I mentioned last week, one of my favorite things to do when grocery shopping is to walk slowly through the meat section and see how many packages are discounted. Just this last week I visited two major outlets in my hometown -- Walmart and Albertsons. Neither one of them had a single package in the protein section that was marked down.
You may wonder how exactly that correlates to the current cattle market? It shows consumer demand for beef, and that despite what's going on in the world, people still have to eat and still want to consume beef.
Secondly, it's important to remember that what does go down, must come up. There's no denying that the cattle market is stair-stepping to lower prices nearly by the day. And although there has been a tremendous amount of equity lost within the marketplace, thankfully the market will again rise. Once the bottom is established, traders and cattlemen alike can be certain that the market will again trade higher.
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ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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