CHICAGO, Ill. (RFD News) — Market analysts are watching to see whether new U.S. tariffs on Brazil will have any lasting impact on the cattle market.
The tariffs were finalized this week following a yearlong Section 301 investigation, but some agricultural products, including certain beef products, are exempt.
Analyst Chip Nellinger said the recent pullback in cattle prices appears to be tied to several factors, with news surrounding Brazil adding another layer of uncertainty.
“Demand hasn’t changed necessarily, but we’ve maybe added a little bit of supply. This break kind of coincided with us ramping up to a pretty high level relative to the last six months or a year, our imports of beef. I think that has something to do with it, maybe a little bigger supply to help cushion some of this big demand. I think some of it is also fund related. The funds had such a long position built up. They’ve made a ton of money in the cattle and feeder cattle market over the last 3 or 4 years, and you’re just in a period here where they’re taking some money off the table. That’s exaggerating our move lower. I think this Brazil tariff news isn’t doing us any favors.”
Nellinger said the cattle market is responding to a combination of trade developments, growing supplies and investor activity rather than a single factor.
