The spring of 2024 has given ample planting opportunities over a great part of the Midwest. The Northern parts have seen more moisture causing a few planting challenges; however, overall planting has moved forward at a good pace.
The old saying that rain makes grain may hold true this year. Nearly all the drought pockets that have been a concern for the last couple years have now seen enough moisture to be listed as normal. Crop conditions from roadside observations look good over most areas.
With the big carry over of last year’s crop, most analysists suggest that upward price movements this year might be limited. This can all change with major weather events or our nation going to war, but outside of these two events we might be in for a less volatile marketing year for grains.
Cattle and the rest of the livestock sector might be a different story- even though we hope that it is not. There have been good profits in the beef sector as supplies remain tight. Though, we need to remember that this is old news. Most producers will tell you that we are short on cattle and the market can do nothing but rise. This is not the case, I believe.
I personally have several concerns about sustaining the current prices we are seeing in the beef industry. We need to remind ourselves that a bull market needs continuous bullish news to move higher or even to stay the same. Demand remains favorable, but there has been a lack of bullish news for the last couple of months. Without positive news a market can fall under its own weight.
On my operation I decided to cut cattle numbers in May. During this time I liquidated many older cows and several yearlings. The market was telling me that there was still some profit in keeping them, but the downside risks looked too great, considering the price I received.
Here are the headlines that I have seen over the last couple of months that assisted me with making this decision.
· Agencies at Odds as the Track Bird Flu
· Fragments of Virus Found in 20% or More GB
· Bird Flu Spreads at Dairies
· Texas Dairy Worker Tests Positive for Bird Flu
· Second U.S Human Bird Flu Case in Michigan
These are just a few of the headlines that have caught my attention. If mainstream media was running these stories, I could only imagine the price event that could follow. This is the very reason I sold excess inventory and made sure that all animals on feed were covered using LRP price protection.
Just remember, markets need fresh news to move prices up. It will be interesting to see what news comes forward for the remainder of the year and how that plays an affect on prices.