2019 Was Rough For Those in the Cattle Industry
It was a bit of a mixed bag for those who are in the cattle industry.
Mike Zuzolo (ZOO-zoh-low), President of Global Commodity Analytics, and says the livestock industry didn’t have a good year.
“No it wasn’t, I mean, given the packer break-evens being in the hundreds of dollars for a lot of the time for cattle, and given the cash prices of hogs struggling to get above the $50 live prices and seeing that African Swine Fever was decimating half of the world’s hog production and hog herd, I would say that 2019 was a big disappointment to the cattle and hog industry.”
And he says the 2nd half of 2019 was especially difficult.
“Not with just the trade issues but also the major fire at Holcomb, Kansas, at the Cargill plant really shot the cattle prices down sharply below break-evens and they did not recover for several weeks. This is where 2020, if we’re going to create a demand-driven low in the grain markets since the trade frictions are giving way to more normalized trade, I would look for the protein markets to find their support and their buying in the short covering by funds first, and that we have a protein market that leads the grain market higher in 2020.”
At the same time, retail prices in the grocery store and at the wholesale level were sharply higher, which he says, “made matters worse.” There are a lot of cattle placed out there and more cattle on feed that aren’t getting into the marketing channel as rapidly.
And he says, retail prices in the grocery store and at the wholesale level were sharply higher, which he says, “made matters worse.”