Addressing Challenges in the Cattle Market: A Call to Action
Explore the concept of Black Swan events in the cattle market and how they can affect market dynamics negatively. The presentation by R-CALF USA delves into instances where markets respond counter to fundamentals and overreact to minor stimuli. Issues such as high captive supply levels and import spikes are highlighted, urging cattle producers to make informed decisions to prevent further market disruption.
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Presentation Transcript
Three Black Swans Presentation By R-CALF USA April 27, 2021
A Black Swan Event Occurs When Markets Respond Counter to Market Fundamentals, Such as When Cattle Prices Fall in Response to Rising Wholesale Beef Prices 2
Black Swan Events Also Occur When Markets Overreact to Seemingly Minor Stimuli, Such as Where Packer Margins Reach Super-High Levels When the Negotiated Cash Market Volume Is Reduced. 4
The Accumulation of Historically High Captive Supply Levels Coincide with the 2015 Market Break. Even Higher Levels Post 2015 Coincide with Ever Falling Cattle Prices. 6
Since 2015 There Have Been Six Clusters of Monthly Import Spikes, Each Coinciding With Six Downturns in the Fed Cattle Market. 8
Are These Correlated Events Coincidence or Design? Cattle Producers Must Decide, and Fast. 10
Your Broken Cattle Market Will Not Fix Itself. If You Do Not Act Now, Your Marketplace Will Soon Look Like the Vertically Controlled Poultry and Hog Markets. 11
This is a Call to Action 1. Go to www.checkoffvote.com and sign the petition for a producer referendum of the mandatory beef checkoff program. 2. Call each of your members of Congress and tell them: a) Support and quickly pass S.949, the Grassley/Tester bill that will revive the dysfunctional fed cattle market. b) Introduce and pass new legislation to restore mandatory country of origin labeling for beef.
