Page 6 - MWC 3-31-2022s

The Midwest Cattleman · March 31, 2022 · P6
Increased Uncertainty Clouds Cattle Market Optimism

By Derrell Peel - Oklahoma State University
The war major grain producing and kets. Russia is a major oil drought will begin to impact
in Ukraine exporting countries. With producing and exporting forage production and pro-
has injected the reality of current dis- country and potential dis- ducers will face rapidly wors-
much uncer- ruptions of grain movement ruptions in global energy ening production conditions
tainty into from the Black Sea region markets are contributing to and additional management
global mar- and the uncertainty of what sharply higher energy prices. and marketing challenges.
kets. Mar- could happen, crop prices Russia is also a major produc- The supply fundamentals
kets do not have soared, pushing high er and exporter of fertilizer. of the industry will contin-
like uncertainty and much of feed prices much higher. These will add to inflation- ue to be supportive with cat-
the market reaction thus far Just a few more weeks ary pressures for production tle numbers decreasing and
is about uncertainty rather will determine whether crop costs and are a threat to beef beef production declining
than reality. The majority planting in the Ukraine will demand as higher gas prices this year. Beef demand has
of impacts thus far on cattle be possible. All crop markets directly impact consumers. been strong up to this point
markets are indirect rather are higher, but the uncer- At this point, direct im- but clearly there are more
than direct beef market im- tainty is focused on the near pacts of the conflict on global concerns about demand and
pacts. term, pushing old crop fu- beef markets are relatively input prices going forward.
Cattle markets are being tures higher relative to new small. Russia is the ninth A war situation like this has
impacted by the effect of crop contracts in the fall. ranked beef importing coun- no analog in recent history
the conflict on crop markets. The most broad-based im- try but only accounts for and there is no way to an-
Both Ukraine and Russia are pacts relate to energy mar- roughly three percent of glob- ticipate when or even if the
al beef imports. However, situation will stabilize in the
global beef market flows may foreseeable future.
be impacted more depending Producers have lots to
on how various countries are watch in a very dynamic and
affected by the conflict. volatile situation. There is
All of these external fac- little choice but to stay tuned
tors combine with the loom- and try to remain as flexible
ing threat of widespread U.S. as possible.
drought on the cattle indus-
try. In just a few weeks, the

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