August 4, 2000

MARKETING

By Bryce Myrick
Director, TFB Agricultural Marketing Education

As I write this column, Fat Cattle are bringing $68 in the Texas Panhandle, while April 2001 Live Cattle Futures are $75.15 and April 2001 Feeder Cattle Futures are $88.95. One of the reasons for optimism is that December 2000 Corn Futures are $1.91. This is 70 cents a bushel below the price 60 days ago. Although beef sales have been good, there are still a lot of cattle in the feedlot. There’s also a concern about weaker sales after Labor Day.

The Feeder Cattle Index is the highest price in seven years. Grain prices are low and beneficial to the cattle feeding business; but, sometimes cheap feed encourages over-feeding which adds unwanted tonnage to our beef supply.

We have a problem, in that, with Feeder Cattle prices high and Fat Cattle prices at $68, fed cattle will lose money. Something has to change. Either Fat Cattle prices have to go up or Feeder prices have to come down. I think there is a possibility both will happen, Fat Cattle increasing and Feeder Cattle decreasing.

To set up workshops or for help with your hedging needs, call 254-751-2242 or 915-698-0355 or e-mail: bbmyrick@swconnect.com.