The cattle price roller coaster of 2006

US - Yet another interesting year for cattle prices is behind us. It seems like each year the September to December time period usually spawns an unexpected event that causes dramatic swings in prices.
calendar icon 22 December 2006
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In 2001, it was the tragic events of Sept. 11 that caused prices to plummet. Just as prices were recovering in October 2002, a strike by West Coast dock workers slowed exports and depressed prices again.

Most cattle producers remember December 2003 because it brought the dreaded discovery of Bovine Spongiform Encephalopathy to the U.S. Continued drought in the western cattle-producing regions in 2004 caused beef cow herd liquidation for the eighth consecutive year, four years longer than normal.

In the fall of 2005, a larger than expected corn crop materialized. This second largest ever corn crop caused corn prices to decline more than 60 cents per bushel and feeder cattle prices increased contra-seasonally to record high levels.

Not to be outdone, 2006 had its share of surprises, with the amazing contra-seasonal increase in corn prices from mid-September to mid-December and the resulting decline in feeder cattle prices topping the list. Soaring corn prices were fueled by a lower than forecasted crop, surprisingly strong exports and skyrocketing demand for corn for ethanol plants.

Source: Farm & Ranch Guide
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