Fall is always a challenging time for cattle prices, as the big numbers of calves come to the market from summer grazing. Its a supply-and-demand situation, and as the supply increases, demand doesn't always keep up.
It's even more challenging this fall, as the nation's financial crisis of failed home mortgages, Wall Street bail-outs and blowhard politicians cause people with money to grow more conservative by the hour, hanging on for dear life. At the cattle auctions this week, many buyers were on the sidelines, waiting for things to sort out. Feeder cattle were $2-$4 lower, fed cattle were only steady when they should be going up in the face of tight supplies--and even cull cows and bulls were lower.
It is easy to yawn, and say "so what?" if you're not affected. But for many farmers and ranchers, this is their annual payday, that won't come around again until next fall.
The market is being ruled by panic, speculation and fear rather than cattle industry fundamentals, which are sound. Supplies are tight, both in slaughter-ready cattle in the feedlots and the numbers of calves and yearlings available to restock them. Fundamentals would dictate that prices would stay strong, and maybe even go up.
But external forces beyond the control of the individual cattleman, and even the whole industry collectively, are calling the shots and costing the industry money.
Raising cattle is a risky business at best, what with weather, disease and balky markets to contend with. You're prepared for those, and even expect them.
But a Wall Street crisis percolating down to the ranch gate? Who'd a thunk it?
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