Cattle Market Analysis– April 1, 2024

The cattle market is currently experiencing a positive trend, with analysts predicting continued high prices due to several factors:

• Shrinking Herd Size: The US cattle herd size has been decreasing, leading to a smaller beef supply available for processing. This limited supply can contribute to higher prices.
• Recent Record Highs: Cash cattle prices recently reached record highs, indicating strong demand from processors despite some earlier market fluctuations.
• Increased Placement on Feedlots: The latest USDA report shows an increase in cattle placed on feedlots, suggesting potentially higher slaughter volumes in the future but also potentially meeting the current demand.

Here’s a breakdown of some additional factors to consider:

• Feed Costs: Corn and soybean prices have recently been volatile. If feed costs remain high, it could pressure cattle producers’ margins.
• Bird Flu: The recent detection of avian influenza in cattle herds raises concerns about potential disruptions to the industry. The full impact is yet to be determined.
• Consumer Demand: Overall, consumer demand for beef remains a crucial factor. If economic conditions weaken or consumer preferences shift, it could affect cattle prices.

The cattle market outlook appears positive in the short term, with potentially continued high prices due to limited supply. However, factors like feed costs, bird flu, and consumer demand can influence the market in the long run.