Broke Cattle Markets, Broken Cattle Feeder
The U.S. cattle industry has lost nearly half our cattle ranchers and over 70% of our feeding operations.
Is it time to do something about the abusive market power of the meat industry?
A self-explanatory table and a chart showing monthly net returns to feeding.
Data are through March 2016.
A 12-year moving average of returns.
Competitive markets adjust over time to big losses and to big profits. Due to the long biological cycle for cattle, such adjustments can take years.
Before consolidation and captive supplies, all of you know that we observed cyles of 10-15 years duration due to these lags. In a competitive market we would expect the 12-year moving average to be fairly stable with no significant trend. Not so. The overall trend in this moving average is strongly negative, revealing a loss of over $100/head in the past 20 years.
The major feeders must be incurring huge losses …. or getting big kickbacks.
Broken markets. Absolutely.
Organization for Competitive Markets