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More volatility ahead in the cattle market

A livestock specialist says 2015’s steep drop in cattle prices is a good reminder for cattle producers to proactively manage their risk.

Scott Brown, is an assistant research professor with the University of Missouri and says farmers need to think about the right time to lock in cattle and calf prices.  “I ask cow/calf producers all the time how many of them have their fall 2016 calves sold,” he says.  “You know – I don’t get many audiences that have a hand go up.”

He tells Brownfield as much as cattle prices have dropped off of last year’s highs – he isn’t sure the market has hit the bottom yet.  “We could have even lower prices by the time we get to the fall,” he says.  “We just don’t do price risk management in cattle, especially at the cow/calf level, like we do in a lot of other commodities.  I think that information is important that there is more volatility ahead.”

Iowa Senator Chuck Grassley, chair of the Senate Judiciary Committee, has called on the Government Accountability Office (GAO) to investigate the drop in cattle prices last year.

Brown says the investigation is good and will help ensure the markets are functioning correctly.

AUDIO: Scott Brown, University of Missouri