Market Outlook

By Mark Sebranek
COO Nextgen Cattle Feeding

As we look back at 2019, we have seen a fair amount of adversity with the Markets, Mother Nature and Economics. Weather varied throughout the year with 13 weeks of snow to start, a fair amount of rain in Southwest Kansas during the spring, then the faucet was turned off at the end of July and drought like conditions at the end of the year. Now I am not complaining about the limited amount of rain in the fall not being a farmer, but it also means no snow, which is a good thing in the feed yard business. The rule of thumb for the first major snow fall and cattle have not been tested, we generally expect around a 70 to 100-pound loss for fat cattle. After 33 years in the feed yard business, I can go without a white Christmas.

Markets started out the year around the mid 120’s, then prices ran pretty much the same as the last two years with positive cash markets to the Live Cattle Board for the first half of the year. It felt like we would see lows in August around $110.00 but we were not expecting the fire at the Tyson packing plant in Holcomb, Kansas on August 9th to happen. We dropped around 11% in the market in the next four weeks before Feed Yards got a foothold and turned the fed cattle market back around. First reports thought we would give up about 16% less marketing, but packers increased the hours at the plant and slaughter numbers maintained with one less major plant running. Tyson started the week of Thanksgiving running a few cattle through the plant. Talking with them, they say they will increase numbers in December while testing is going on to make sure everything is working properly. We will start sending grid cattle by the first of the year. We look forward to ending the year on a positive note in the markets to help jump-start 2020.

We have been doing a lot of construction at Riverbend Feed Yard and the expansion is close to completion with pen construction. This has worked in our favor, as we have been finishing alleys and increasing numbers slowly through the year. Upon completion, Riverbend will be a 25,000 head capacity.

The big question is what we will see in 2020. I am excited to see trade agreements begin with Japan and China; this will help exports increase for beef and other proteins along with the increase exports to Korea. As we get more control on tariffs, we should see more exports and lower imports to increase demand for good US BEEF. If this becomes reality, I feel markets could increase to be in the $130.00’s for fat cattle by the end of spring, which in turn would increase feeder cattle markets for our customers.