Shootin' the Bull about flying blind

“Shootin’ The Bull”

by Christopher B Swift

​10/20/2025

Live Cattle:

​A suppressant was found in the words from President Trump on Thursday that quickly lowered the flame that had been building all week. If the beef comes from Argentina, my best guess is that it will enter into food service or processed foods ready to eat, rather than steaks or roasts.  Like eggs, they went into commercial bakeries and food production.  This relieved the pressure of commercial buying from the market and allowed retail consumer egg prices to decline.  As well, it gave US egg producers a chance to catch up.  Potentially, imported beef would have a similar impact as did eggs.

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Protectionism is reaching a new level. As most agree that inventory from Mexico only made up to 1% to 2% of cattle production as a whole, but that same inventory could be 100% of someone's livelihood. Is an American cattle producer less of a producer if works with imported cattle from Mexico or Canada? Are they turncoats?  No, they are trying to supply the same quality product to the market they supply, the same as everyone else to the market they supply. I say this due to government action believed having a significant impact on the rise of cattle prices, and therefore with further intervention, may have a significant impact on the decline of cattle prices. Hence, long way around the barn, but I expect even more government interference, creating more price volatility and expanse in either direction. With everyone knowing the situation about cattle and beef, even the fishing boat captain new something about it, and work being done to help moderate the supply issues, only cattlemen are still inhaling risk. 

If all works out smoothly, it will still be a few months before the imports begin to be enough to help.  Hence, watch for spreads to develop between front and back months.  By spring, imports could be a stream and help offset any heifer retention.  This suppressant is not expected to put out the fire, but could be enough to get it under control for long enough to burn itself out.  

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Feeder Cattle:

Cattle feeders have their hands full managing the most expensive inventory in history on feed.  I recommend you do something for yourself in a manner that may help to moderate a large adverse price swing that may or may not develop due to projection of significant negative margins by cattle feeders.  In my opinion alone, the next most probable move will be a reduction of pen space availability due to the inability to operate at a profitable capacity.  Something to consider would be that as the US is circumventing Mexican cattle inventory, Mexico is most likely increasing the capacity to feed, slaughter, and distribute beef domestically.  The stronger these production lines become, the more difficult it may be to import cattle from the South if the border does reopen, leading to further reduction of feeding capacity. The governments interference in commodity production is causing extremes on both row crop and livestock production.  As both are at polar opposites, and again, interference from the government attempting to raise the price of row crops and lower the price of livestock, is going to be a sight to behold.  Lastly, inflation is not subsiding.  Therefore, consumers are unlikely to increase willingness to spend or consume more beef in the near future.  

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​Corn:

​By the close, even wheat was higher on the day. Corn was able to pull itself off the bottom and beans actually traded higher.  A China deal could send shock waves through beans.  Corn maybe not as much, but a willing follower more likely than not. If feed is not fixed while paying historic prices to place cattle on feed, get it fixed now.  If having been hesitant on buying calls on soybeans, stop.  Get the calls bought.  I don't have any idea as to what the President is capable of, or sustaining anything accomplished, but regardless of, his track record is pretty good and if only accomplishes a little, it could be enough change to your operation to go from positive to negative. 

Energy:​

​Energy was mixed today, but most lower.  Diesel fuel was the stronger of the complex.  Natural gas soared today on thoughts that Europe won't be buying their natural gas from Russia this winter.  That could be a boom for US gas production.  If Russia becomes more circumvented by the world in oil sales, they could dump oil on to the market or it could strengthen ties with those we don't like to do business with. For the moment, the stagflation and inflation of the US is believed causing more of a recessionary environment than of growth. If there were any growth, I think it would be the upper tier simply skimming more the lower tier.  Energy is believed in a fledgling bear market.  

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Bonds:

​Bonds are firm because it is believed the inflation and stagflation will lead to recession.  With bonds in a fledgling up trend, and energy down trend, the direction of both suggest to anticipate more recessionary factors to come. The only reason to lower rates is to entice you to invest rather than save. I continue to believe the world is spinning a lot faster and more money than ever is sloshing around, being traded by computers than humans, with little to no ramifications were some bug to impact multiple connected derivatives markets. Leading me to anticipate that were cattle to trade lower, it may be due to consumer demand than an increase of cattle supplies. 

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