What is in this article?:
- Cattle price pullback was likely even before LFTB discussion.
- Labeling changes and other ramifications could come from the LFTB discussion.
- Consumer reaction to LFTB will also be relatively short lived.
Given recent historic highs in cattle prices, it shouldn’t have been surprising to see values dip somewhat during March, but consumer response to news of lean, finely textured beef in the nation’s meat supply hit cattle and beef values harder than many could have anticipated, according to a Kansas State University agricultural economist.
“I think we were due in early March for a pause. The fact that we’ve had a pullback from historic highs is not really a surprise,” said Glynn Tonsor, livestock marketing specialist with K-State Research and Extension.
He said CME April fed cattle futures closed at $118 per hundredweight (hundredweight) on April 6, down about $12 from a month earlier. Similarly, April feeder cattle futures closed at $148, down from $161 in early March. Cash cattle prices softened similarly, with Kansas fed cattle prices off about $3 at $123 to $124 on April 6.
“But the fed cattle basis is quite strong – stronger than normal,” Tonsor said, with cash cattle trading $5 to $6 over futures. Part of the concern right now, he said, is overall demand for beef. Beef exports have been generally flat compared to last year, as has the dollar index.