By Joanna Levin
THE US beef complex has continued to decline despite the collapse in the maize market.
This would normally have provided a boost to stores and live cattle prices but US cattle producers have reported the worst market conditions in several years.
Many producers in Texas are unable to find buyers even at reported market levels. The cash price for live cattle in Texas has plummeted to a low for the year at 57¢/lb.
The market has been affected by a combination of the oversupply in Americas feedlots. A vicious circle has been caused by producers holding onto herds longer in the hope of higher prices, thereby creating heavier animals.
The availability of cheaper feed is a further incentive for producers unable to cover their costs to delay sales in the faint hope of a market rally. Many producers are able to break-even at current market levels but financial turmoil and instability in other global markets are further affecting the price.
The September futures price for store cattle on the Chicago Mercantile Exchange inched up 1.07¢/lb on August 26 to close at 67.670¢/lb, but is still down from over 68¢ a week earlier.