Beef follows Stock Market

“Predicting what the future’s gonna hold for us is not a very profitable thing these days.”

 That’s AgriBeef Executive Rick Stott talking about what’s happening countrywide with the beef industry and, completely out of keeping with tradition, he may have the key to predicting future beef prices in the business section of the newspaper.

 (Stott) “Perhaps for the first time that we’ve seen, the beef prices, the fat cattle prices, are following the Dow. When the Dow’s down the beef prices are down. It typically doesn’t happen that way. Not that they’re counter-cyclical by any stretch but they’re certainly not typically correlated as they seem to be today. We’ve been seeing more and more of that kind of movement across the board. In a general sense the cattle industry is reacting to the decline in consumer confidence and consumer consumption. Financial implications that are happening are going to be industry changing. The beef producers, feedlots in particular are losing $200-300 a head across the country.

 That said, Rick says he hears lots of scenarios, but the last one he mentions gives lots of hope.

 (Stott) “You can take any analyst and they’re going to have their bent. Some believe it’s not going to come back until at least 2010 and others believe we’re on the precipice of this huge rally and change in the momentum.”