Call the Market

In all seriousness, what kind of world do we live in? What have we allowed the cattle market to become? At a time in which the U.S. beef cow herd sits at a historic 74-year low, and beef demand is red-hot, how can it be that the market is so easily cratered whenever a news headline pops up? One would think tangible market fundamentals like supply and demand would hold more weight than whatever's circulating around for daily news; but I guess that's not the world we live in.

If you aren't up to date, an international news wire service shared a post Tuesday morning detailing that U.S. Ag Secretary Brooke Rollins made it clear the U.S. is not ready to reopen the border, as New World screwworm remains a threat. None of this was new "news" as the industry got confirmation last week from Rollins on that specific topic. Rollin's announcement that the border will not reopen anytime soon was received as bullish news by the marketplace and helped drive prices higher through Monday's close. But because the news outlet happened to state that President Trump was "very interested" in reopening the border, despite the reassurance that Rollins shared, mayhem ensued throughout Tuesday's trade. To be exact, the spot December live cattle contract fell $4.42, again pushing the contract back below its 100-day moving average, and the spot January feeder cattle contract fell $7.30 and was also pushed back below its 100-day moving average.

I wish President Trump would hear what true cow-calf producers want to have happen regarding the handling of the U.S./Mexico border. Not what D.C. lobbyists say should happen, but what operators who have their necks on the line, their names tied to bank notes and their livelihoods at stake say should happen with the U.S./Mexico border.

I wish news outlets didn't thrive on clickbait. I wish that analysts, journalists, editors and all those entrusted with the privilege of sharing content and information, and the politicians who create the statements that are shared, used more discernment before they "hit send" for the worldwide web to absorb. Because while there may be a world which operates -- and even thrives -- in chaos, there are also people directly affected by the markets' ebb and flow. And when it's pandemonium that's driving the complex, it's a gut-wrenching feeling.

So, for those of you who have an iron in the fire and aren't sure what to make of the cattle complex as of late, I want to share a couple thoughts with you.

First, despite the technical chaos that's ensued over the last two weeks, nothing has changed fundamentally, and that should bring you some peace. There haven't been any significant signs of herd-retention yet, boxed beef demand still remains incredible, and although the market has lost significant ground in the last 15 days, prices are still at a historically high threshold.

If you're up against time and a note is coming due, you'll still make out well in today's marketplace. Maybe not as strong as what the market was in the middle of October, but still stronger than what it ever was in years past.

But if you've got the liberty of time and aren't pressured to sell, as I mentioned earlier, nothing has changed with the market's fundamentals, and remember your asset remains an asset up until the point you choose to liquidate it.

Second, what we've seen unfold in the cattle complex over the last 15 days has been a massive erosion of confidence. So, looking at the long-term, what effect do you think the board's unpredictability is going to have on the market over the next year? I personally believe the board's fickle nature and volatile tendency is only going to further defer the domestic herd build-back. Producers know how bullish the market's fundamentals are; but even so, the cattle complex isn't safe from explosive breaks as bullish fundamentals are just one side of the market equation.

Nevertheless, just like you, I'm disgusted to see how the market has performed over the last two weeks. And while it's our job to be active and informed participants, I also believe having the Chicken Little mindset of "the sky is falling" isn't helpful either. There's a reason why throughout the New Testament Jesus often went off by Himself to pray and be alone. Control what you can control. Be a good shepherd to what's been entrusted to you. If you're feeling called to make a difference in the marketplace, let the leaders of the organizations that represent you hear your frustrations. But above all else, don't make hasty decisions in the heat of the moment.

As I've mentioned time and time again, nothing has changed with the market's fundamentals, and even with this recently endured pressure, the market is still ripe to grow stronger moving into 2026 as supplies of both market-ready fed cattle and feeder cattle will tighten.

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

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