Dive Brief:
- Unusual weather patterns in multiple locations across the globe are playing havoc on cattle prices. And there are indications that prices could be affected for years to come.
- Brazil, where scorching heat has destroyed pastures, recorded the highest prices in history this week for live cattle.
- In Australia, a drought has led ranchers to cull the herds in order to boost prices, but such moves also reduce the size of the breeding herd — making shortages likely in coming years.
- Meanwhile, the U.S. beef cattle herd is the smallest it has been in six years, and freezing temperatures across the Midwest are slowing the movement of cattle to market.
Dive Insight:
The world, or at least its weather, is falling apart. Nowhere is that more apparent than in the cattle futures markets. And as supplies rise and fall in dramatic shifts, and as the analysts and government types collect the numbers and estimate the size of herds in years to come, lots of folks see opportunity in the chaos of the futures pits.
Even when you put the weather aside, things are likely to be crazy for quite some time in global beef markets. First, there's no end in sight to Argentina's currency crisis. Until that is resolved, that nation simply won't produce much cattle for export. Second, the upcoming rules on country-of-origin labels for meat in the U.S. are certain to push meat producers to alter their supply chains.