Beef and Hay Market Snapshot

The U.S. cattle market experienced a record-breaking year in 2014. Northwest Farm Credit Services Knowledge Center’s Matthew Kloes gives an update on the beef industry.
Kloes: “The U.S. cattle market experienced an exceptional year in 2014. Prices remain strong across all cattle classes in the New Year, supported by short supplies and record beef prices. However, price volatility and the rising cost of feeder cattle has resulted in extreme margin calls and increased capital needs for cattle feeders with hedging programs. Volatility in the cattle futures market made news following several days of ‘limit down’ movement in mid-December. Analysts attribute most of the decline to investment fund managers liquidating positions at year end for tax reasons, and expect the market to stabilize in 2015.”
Turning to the hay industry, the hay market activity was heavy early in 2014, but slowed throughout the year. Kloes continues with a hay update.
Kloes: “Northwest hay markets entered a lull, with prices under downward pressure heading into 2015. Demand for hay is expected to drop in 2015 as dairies position for lower milk prices, and hay exporters contend with a higher value U.S. dollar, slowdowns at West Coast ports, and a change in the Chinese government’s hay testing protocol that has curbed shipments to that market. An end to the port slowdowns and favorable negotiations with the Chinese would bolster the outlook for hay demand and prices.”