Market Report - March 10, 2023

‍Ross Bronson, Ag Risk Consultant, Redd Summit Advisors

Cattle Market Report

We are seeing an expected cooling and slight correction in the markets. We are coming into the summer season, so I don’t anticipate consumer spending to change in the near future. However, it feels like a recession might be inevitable and that could be the market challenge for this year. The current banking concerns will not help the mentality of the country even though the scope of the issues, so far, seem small. Even if economic concerns slow consumer spending, the lack of inventory has the potential to support pricing. I think one important thing to remember is the difference between the futures and cash markets. Manipulators will often push futures markets higher or lower as they please. While the futures market definitely influences the cash market, I anticipate higher stability in the cash market then I think we will see in the futures over the next six to twelve months.

A lot of people have been asking about Livestock Risk Protection with current prices. In general, I feel like LRP is a great option to lock in prices, but I think projected ending values at $250/cwt or above is where I would get more aggressive. With the possible market climb, make sure you are willing and able to pay the premium. If a recession does materialize, it could temper prices and even send them lower.

Grain Market Report

Corn has continued a downward trend even with the corrections along the way.  This will help support cattle prices as feeders will feel more confident in their margins. Soybeans on the other hand have been more volatile with large changes over the last two weeks. We are still waiting on China to see when they will begin buying once again. The weaker dollar is supporting pricing more recently.

Sheep Market Report

Lamb prices corrected a bit this week. Most markets were steady to lower. San Angelo was $5-10 off. The USDA estimated domestic lamb and mutton meat production for the week ending March4th totaled 2.35 million pounds on a 35,000 head slaughter this week compared to 2.24 million pounds and 34,000 head the previous week. Imported lamb and mutton meat totaled 3.17 million pounds which is 142 percent of the domestic production for the same period.

‍Hay Market Report

Recent drop in alfalfa prices has encouraged more dairies to include higher amounts of it in their rations. However, dairies are scrimping with milk prices down. For the Pacific Northwest winter weather has kept trade at a minimum, although there does seem to be a lot of transport happening recently. The desert southwest is just getting started on their first crop. Exporters are still struggling even with the lower dollar.