Sort & Cull

There are several different sayings that seem to perfectly describe the chaos that Monday's market endured. Such as, "When it rains, it pours," or even from The Wizard of Oz, "Lions and tigers, and bears, oh my!"

But in our case, it's simply, "Tariffs, Mexican cattle imports and seeing the board trade sharply lower, oh my!"

Initially, we expected the live cattle and feeder cattle markets to trade sharply higher Monday morning, as the annual Cattle Inventory report released Jan. 31 showcased once again a decline in the number of beef cows and beef replacement heifers in the United States as of Jan. 1 -- which promises limited numbers of feeder cattle again in 2025 and likely well into 2026.

I thought it was especially interesting to note that of the Top 10 beef-producing states in the U.S., the year-over-year changes in each of their individual beef cow inventories varied: Texas up 1%, Oklahoma up 1%, Missouri up 2%, Nebraska down 3%, South Dakota down 3%, Kansas steady, Montana up 1%, Kentucky down 4%, Florida steady and North Dakota up 1%.

And when it came to beef replacement heifer retention, once again, the data varied notably: Texas down 6%, Oklahoma up 1%, Missouri steady, Nebraska down 8%, South Dakota up 2%, Kansas up 3%, Montana steady, Kentucky up 5%, and both Florida and North Dakota were steady.

But lo and behold, traders weren't consumed with the news about last Friday's Cattle inventory report; on Saturday came President Donald Trump's tariff announcement regarding Mexico and Canada, and the news from APHIS that Mexican cattle imports will resume in a few days. All this news overpowered any of the market's positive fundamental realities.

For a few of DTN's stories for background:

-- Click here to access DTN's comments for the Cattle Inventory Report: https://www.dtnpf.com/…

-- Click here to access DTN's comments regarding the new tariffs for Mexico and Canada: https://www.dtnpf.com/…

-- Click here to access DTN's comments regarding APHIS announcement that Mexican cattle imports will resume: https://www.dtnpf.com/…

Unfortunately, there are many questions that are concerning you and me -- only time will tell some of the answers. I wish we knew more on USDA's plan of how they intend to reopen the Mexican cattle imports, but more specifics are needed.

From a solely fundamental standpoint, it's likely that the cattle will be well-received, as buyers are aware that the available number of feeder cattle and calves is going to remain thin again in 2025. But the big question at the back of producers' minds is: Will this influx of imports affect the market and weaken prices? And that's largely going to depend on timing. If the feeder cattle that were set to be imported during the last two months are trickled into the U.S. in a methodical nature, then prices won't likely see a dramatic decline. But if all the cattle that were set to be imported during the last two months show up in the marketplace all at once, then some market pressure will likely be seen.

I know it's disheartening to look at the futures complex and see the board fully lower, with red prices scattered across all the markets. But I also believe that Monday's reaction is psychological, and that the cattle complex will again find its footing.

Unfortunately, in the world we live in, news travels fast. People love to react to the news -- most of the time in a negative manner. Monday's cattle market performance doesn't feel good emotionally, and depending on how far the prices fall, this can be costly. But given where we sit with our market's fundamentals -- low supplies amid tremendous demand -- I continue to believe that a fruitful 2025 is in store for cattlemen.

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

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