Market Report - December 16, 2022

‍Ross Bronson, Ag Risk Consultant, Redd Summit Advisors

Cattle Market Report

The cattle market sure has been interesting to watch the last two weeks. In particular, the box beef prices which went on a little roller coaster ride. We can see the fat cattle market starting to feel confused which was inevitable. Buyers are seeing that their supply is dwindling and trying to flex their muscles a bit, but it seems like feeders can see what’s coming and are holding onto fats in order to get higher prices. I think that negotiation is going to be more available for feeders and cow-calf producers alike as next year shapes up. We won’t see a reliable trend until after the first of the year.

Something to note. There is a lot of discussion about packer margins shrinking and going negative. Packers are large businesses and have a long-term mentality. They are willing to operate at a loss for a while, especially after the large profits they have enjoyed in more recent times. Some think that they will push back on higher prices. I don’t see that happening. They might cut back processing some and fora short period of time, but they know the challenge of ramping up production again if they choose to stop in the name of profits.

Grain Market Report

Markets are entering holiday mode, and the grains are no exception. A lot of purchasing ahead and most likely a continued quiet market until after the first of the year. Prices are still strong and don’t look to change anytime soon. Yields came in a little lower than expected this year and the whole Black Sea deal just keeps doing its thing. I am not a grain guru, but I am happy to see that the markets are not reacting as intensely to every little change going on in the Russia Ukraine conflict. There are several year end reports that may affect the markets in January, and South American weather will be a player for the next several months as well.

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Sheep Market Report

Sheep markets were steady to lower this week. Hamilton, Fredericksburg, and New Holland were steady to lower. SanAngelo and Goldthwaite were lower. The USDA estimated domestic lamb and mutton meat production for the week ending December 10th totaled 2.24 million pounds on a 35,000 head slaughter this week compared to 2.37 million pounds and 37,000head the previous week.

Hay Market Report

Winter has come fast and furious in a lot of the country. Early snowpack levels are encouraging, but we all know that can change quickly. The weather has trades low as shipping is difficult right now. Many have on hand what they need and are looking to spring in hopes of lower prices this year. If we can keep the moisture coming, we should see a bit of relief in prices. However, input costs may keep prices up in 2023.