“I don't care if it's cattle, I don't care if it's corn, I don't care if it's crude oil, I don't care what it is,” declares Senior Market Analyst Darin Newsom. “Markets are not tied to fundamentals at this point, which is what's going to make this situation in cattle that much more interesting.”
If you haven’t been following the industry chatter – either here at Barchart, or even in the mainstream media – “this situation in cattle” broadly refers to soaring prices against a backdrop of fairly brutal conditions for US producers: rising feed and processing costs; the specter of New World screwworm; adverse weather conditions; and now a geopolitical crisis that’s impacting fertilizer deliveries through the Strait of Hormuz.
But no market can keep climbing forever. While US consumer demand for beef has remained admirably resilient in the face of surging prices, those same consumers are now facing gasoline at over $4 a gallon – courtesy of, again, the Strait of Hormuz snafu.
“If you’re paying twice as much for fuel as you were 60 days ago, who’s going to have the disposable income to now go out and eat a historically high-priced steak?” asks Newsom, who warns that “it's going to be a rough haul in the beef industry over the next few years.”
For the untold story on:
- What’s been driving higher beef prices
- The warning signs that Newsom is watching in the market now
- How big-money traders are betting on poultry
- Why policy proposals aren’t working
Read our full interview on Barchart’s official Substack >>
On the date of publication, Elizabeth H. Volk did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
