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Wednesday, October 07, 2015

Cattle market continues historic slide; consumers should begin to see lower prices in grocery stores

The historic slide of the cattle market should continue into next year, reports Agri-Pulse. After a record-setting 2014, over the past six months "the live cattle contract has lost over $25 per hundredweight," and the feeder cattle contract has lost $33.75 per hundredweight. "Longer-term figures look even grimmer, as the live cattle contract has lost over $35 since its 12-month high in November and the feeder cattle contract is down $52.75 since reaching its peak in the last year in early December."

Duane Lenz, general manager of the beef industry research firm CattleFax, said the current downward swing ranks in the top three all time, reports Agri-Pulse. He said, “Next year will probably average lower than this year, so other than short-term price bounces . . . the next rally is probably not going to occur here for a while.” He said "there was 'no way to forecast' the current drop, which he said really caught the industry off guard." (Agri-Pulse graphic)

For consumers, the slide should lead to lower prices in grocery stores, reports Agri-Pulse. Lenz told Agri-Pulse, “It’ll take longer than you think just because retailers don’t know if this is a temporary or a long-term situation. We are starting to see retail prices drop, but it’s very small. I would say that before we see a big change in the supermarket, you’re probably looking at five, maybe six months.” He said it is unlikely that cattle prices will return to 2014 numbers. Agri-Pulse is subscription-only but offers a four-week free trial.

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