Sort & Cull

The Importance of Understanding the Context

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
Friday's Cattle on Feed report shared sharply higher placements. (DTN ProphetX graphic)

The unknowns, the unforeseen and the lingering "what-ifs" of the cattle market are some of the most dangerous landmines that the marketplace and producers dance around. Sadly, there will always be unforeseen events pop up, such as COVID-19, but the more understanding and relevance that cattlemen can gain by knowing the marketplace, the less likely they are to be caught off guard.

For instance, lets discuss Friday's Cattle on Feed report. Given the mayhem that filtrated through the marketplace earlier this spring, placements were at an all-time low. With packing plants being shut down due to COVID-19 restrictions, the certainty in the slaughter system was unknown.

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As producers saw what was happening with the beef-supply chain, most opted to hold onto their feeders longer than they had planned, hopefully to find better prices later down the road. Cattlemen, feedlot managers and industry analysts knew that those cattle would eventually work their way into feedlots scattered throughout the United States, but "when" was the unknown variable.

As the summer progressed and July turned to August, feeder cattle prices were better than most anticipated and producers jumped at the opportunity to market their cattle. And lo and behold, September's COF report shared larger placements. So, should Friday's COF report really be that bewildering? No, not at all. If anything, Friday's report helped producers understand their long-term plan and helped solidify the fact that, when the marketing system is altered, producers will see unusual marketing for a long time.

Click on the link provided to see Friday's COF report and DTN's comments: http://online.dtn.com/…

Check out the latest Cattle Market News Update on the DTN/Progressive Farmer Facebook Page or click here: https://www.facebook.com/…

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

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