Market Implications of BSE Case

1
Market Implications of BSE Case

• The initial news shock will cause cattle prices
  to decline 15 to 20 percent immediately.
• Fed cattle at Nebraska packing plants 74-78.
• 700-800 lb feeder steers at ND/SD auctions
  72-82.
• 500-600 lb feeder steers at ND/SD auctions
  92-102.
• These are averages, individual lots will range
  higher or lower depending on quality and other
  market factors.

2
ND Situation

• The first full week in January is usually the
  largest sales volume week of the season.
• Several auction markets usually hold special
  sales, but dates may be changed this year.
• USDA, AMS records prices and volumes at 6 ND and
  10 SD auctions called Dakotas series.

3
Dakotas Feeder Cattle Sales Volume Peak Weeks(
of head/week)
4
Producer Strategies

• Futures and cash markets will be quite volatile
  from day-to-day as new information, both negative
  and positive, becomes available.
• Future market options protect from sharply lower
  prices, but premiums will be expensive due to the
  increased volatility.
• Cattle should be marketed according to original
  marketing plan. Holding cattle after they reach
  market weight and grade usually does not pay in
  crisis situations.
• Do not wait for possible government compensation.
• Contact your auction market they are aware of
  market conditions in your area.