This week was a little bit of a wild trip within the markets following the JBS fire that occured in Granville Island, Nebraska.
The plant — that has the capability to course of 6,000 head of cattle a day — is now again up and working, however it has many asking “how does this impact the cattle market?”
Anne Wasko, of the Gateway Livestock Change, says that due to the dimensions of the plant, markets definitely reacted, and so they reacted quickly. Additionally, it’s a reminder of how delicate the markets are when it comes to whats taking place to that provide channel.
“In all those uncertainties — whether it’s a fire, or any of the various things that tend to pop up in the last couple of years — the market doesn’t like those uncertainties. Of course, the futures market traded significantly lower on Monday, but recovery here as we speak later in the week has come around. They are back operating, and it was a short term impact to that supply,” Wasko explains, including the harvest challenges talked about from COVID-19, and the Tyson plant fire from the autumn of 2019 had rather more long-term impacts.
Every time these sorts of issues occur, Wasko says it actually highlights the disconnect between what occurs within the processing facet, and what occurs on the producer facet.
“You have a shortage of production, wholesale prices go up, and cattle prices go the other way. So that’s unfortunately what we’re learning — and have been well aware of for some time — is there is a pretty big disconnect, and we see it highlighted here,” she explains.
Take a look at a market recap with Anne Wasko and RealAgriculture’s Lyndsey Smith, beneath: