To understand where the cattle market is in September, AgMarket.Net’s Tim Strunk looked back on late-summer weather conditions.
“Everybody was trying to keep cattle alive,” Strunk recalled. “Moods were bad.” And the last thing anybody wanted to do was gather and ship cattle.
That’s when August placements hit just 91% of year-ago levels, marking the fifth-smallest monthly total since 1996. Strunk, a cattle producer and risk management analyst, said on this week’s episode of Ag Marketing IQ In Depth that extreme heat and deteriorating sentiment among margin-squeezed cattle feeders drove the decline.
The result is tight numbers that suggest continuing supply constraints will help support profitable price levels. At this point, Strunk said, cow-calf producers remain in the driver's seat, with sales across the country staying strong even as cattle feeders purchase animals requiring $20 to $40 rallies just to break even.
To sum up current beef market conditions: It's not the best time for the cattle feeder, but it's a pretty good time for the guy selling calves.
That said, Strunk warns against complacency. “The market can turn on a dime,” he said.
While nothing jumps out as super attractive for making moves right now, producers need to consider risk management aligned with their specific selling time frames.
The market demonstrates resilience. And Strunk is less concerned about consumer sentiment as beef prices rise proportionally with other goods.
One area to watch, however, is the market impact of Mexican feeder cattle imports through the recently reopened Stage 3 protocol for New World screwworm.
The impact so far is minimal, with imports moving far slower than industry estimates of 250,000 head by year-end. September placements likely mirror August's weakness, and Strunk said that indicates continued fundamental support.
For cattle producers, Strunk advised tuning out the market noise and focusing on their business needs and goals — whether that’s holding onto every animal, making some sales to generate cash flow or buying Livestock Risk Protection.
“It boils down to keeping the wheels on your own operation,” Strunk said. “If you're OK with the amount of dollars that you can protect right now, there's nothing wrong with taking steps to do that.”
At the end of the day, it's about managing risk, protecting margins and staying profitable through volatility.