The cattle market evolves, sometimes abruptly in response to dramatic events. Effects of the COVID-19 pandemic were foreshadowed late last summer.
According to livestock market specialist, Derrell Peel, “We obviously have short run impacts, like the fire in Kansas in August 2019. What that really illustrates to me is just how vulnerable, in some sense, that we are in this industry to that supply chain that’s out there. It’s a perishable product we’re moving, if you take an average annual production, over 500 million pounds of product a week through this industry, and any sort of significant and unexpected disruption like that causes major market reactions.”
Based on a single location then, and greatly magnified this spring system wide, chaos entered the cattle markets. “It generated a lot of discussion, obviously, about what happened both on the wholesale meat side, what happened to cut out values, and implications for packer margins....It also illustrated very well how markets work, and markets will fix a very severe shock like that, but sometimes the way it gets done is in a way that we’re not really very happy with,” Peel states.
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