What's up with cattle prices? Buyers, brokers, bankers speculate

By LYNN MONTGOMERY | East Texas Edition

April 18, 2002 -- The recent price drop in the cattle market appear to have many people scratching their heads.

"There's just not a good reason for what is happening," said Jack Watson, a cattle buyer from Simms, "and no one knows what is going to happen."

These thoughts have been recently echoed by other cattle buyers, salebarn owners, and cattlemen across the East Texas region.

Fluctuations in the market are common, but 600-weight feeder prices are low and getting lower at a time of year they normally do not.

"Right now (April 12), cow/calf and lightweight (cattle) prices are holding steady, but the 600-plus weights are in a bind," Watson continued. "The movement of meat is good. Consumer purchases are good. People need to get positive."

Another cattle buyer stated there are "too many hogs" and "Russia kicking back chicken" are the solid reasons for the drop in prices.

The current Russian ban on U.S. imported chicken is being worked out among trade officials.

On the other side of the field, after a sudden drop in live hog prices, the National Pork Producers Council (NPPC) asked senior USDA officials the week of April 8 to purchase, to their fullest extent, pork and pork products.

Chuck Levitt, a livestock market analyst with Alaron Trading, offered his opinion to the current market and futures price drop.

"There's too much meat on the plate. There's record large pork and chicken output joining record large beef output for this time of year," Levitt said. "This means retailers can leverage one meat against another. Too much competition for the consumers meat dollar. "

Also, there's "probably 10 percent more cattle on feed in March than last year. Now (we) have a record large number on feed again for this time of year," he added.

"I don't believe it is a time to bail," stated Brian Cummins, Van Zandt Extension agent and veteran cattleman. "In 1996, there was a slump in prices and we pulled out. It will be interesting to watch it play out. We definitely don't need to flood the market (with cattle) just because of what is happening."

Whether or not the market has hit "bottom" is another concern for the cattle industry. Some believe that the market is at bottom while others believe it will continue the downward swing.

"The other day I talked to the second lieutenant at Cactus feedlot and he was saying that we had hit a bump but would start to rebound the next day. The next day, the market started going down," said one buyer from Upshur County. "I know we are in a world of hurt."

According to Dwyatt Bell, president of AgriLand, Farm Credit Services, the continued Farm Bill debate and continual uneasiness over foreign diseases are playing key roles in market fluctuations.

"People are worried about two pretty important provisions in the Farm Bill. One is the packer ban (which limits the amount of days a packer can own cattle before slaughter.) The other is country-of-origin meat labeling which means meat must be labeled with the country in which it comes from," Bell stated.

The price drops were evident in the livestock market reports received by Country World. Market prices for 600-weight cattle were reported in the March 21 edition were $71-104 per hundredweight at J & J Livestock, Texarkana, and $70-90 per hundredweight at Tri-County Livestock, New Summerfield. Just weeks later, the 600-weight cattle were at $66-94, J & J, and $64-94, Tri-County.

But as the saying goes, "Who knows what tomorrow brings?" Cattle producers hope that prices rebound and trading returns to normal.