Leaders Provide Market Recap, Look Ahead
For cattle producers, 2020 started optimistically, after the fall 2019 Tyson plant fire in Kansas that blasted prices through that fall.
“Then the market started trending up a little to start the year 2020,” said National Farmers Livestock Director Pat Lampert in Livestock’s Virtual Convene ’21 workshop. But as it turned out, with the COVID-19 pandemic, 2020 was a “tumultuous year” in the fat cattle business, he said.
Program Manager Jeff Rose agreed. “It caused a lot of disruptions as far as getting cash cattle sold,” he said. Upon reopening, the plants prioritized the contract cattle they were obligated to process, which was good for Nexus customers, and many plants weren’t in the cash cattle market. “Your staff did a yeoman’s job getting cattle out and prioritized before they got over-fat and before death loss,” he said.
Lampert, also crediting staff, highlighted the year-on-year cattle number growth that’s trended in the Division’s volume, through the pandemic, and years prior.
Analyzing 2021 cattle futures, Lampert emphasized unusual activity in January, with year-out prices higher than nearby months. It appears the market is pricing in tighter numbers starting in the second quarter.
Rose recommended monitoring feeder cattle and corn prices and breakeven levels, and staying in touch with staff to contract and hedge at the right time. He suggested if exports continue at good volumes, people get vaccinated and the economy opens more, opportunities for locking in prices for cattle could arise.