Last week's exciting rally in the cash cattle market and substantial gains seen on the board probably left producers feeling like they were sitting on the edge of their seats as they waited to see what would happen next.
After trying to coax prices to go higher this spring, producers welcomed last week's cash cattle prices when they jumped $17 to $20, depending on the region. Feeder cattle sales were larger in quantity and stronger in price. Even last week's slaughter started to inch higher, although still not where it needs to be.
Unfortunately, Monday bucked last week's positive numbers: The board traded anywhere from $2.00 to $3.00 lower in both live cattle and feeder cattle contracts.
You may be tempted to roll your eyes, sigh in disappointment, or use some colorful language, as this frustrating season of less-than-ideal prices is starting to wear thin on everyone and especially in your wallet. You expect and want logic, but the market keeps trading illogically.
Whenever there is an imbalance, the cadence of how the market "should" or "would usually" react isn't always a safe bet in unprecedented times. And I'd say boxed beef priced well over $400/cwt and a backlog of cattle greater than the industry has ever seen before is definitely an "imbalance."
This chaotic cattle market isn't going to settle down anytime soon. There are thousands -- if not more than a million -- head of fat cattle to be processed that will continue to affect our industry until the market is current again. And have you thought about how these current boxed beef prices are going to stand the test of time? They won't, period. This is going to be utterly brutal: As packers start to come back and cycle through cattle, boxed beef prices are going to drop fast.
The vast price swing that the market has already endured is only half of the equation. As cattlemen try to rebuild their business and prevent a market collapse like this again, challenges will continue to arise. There isn't a simple one-step solution to this mess. But, as we all have learned through this process, cattlemen are quick to adapt and unwilling to give up. Working through this time of hardship isn't easy, but they're learning to pace themselves. The race to the finish line is far from over.
ShayLe Stewart can be reached at firstname.lastname@example.org
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