Cattle prices collapsed to a five-year low on Friday at $1.02 per pound. Prices are dropping on expectations that grilling demand will decrease in the coming weeks as temperatures break lower in the shift toward fall weather.
As prices are falling, some cattle producers are dumping their herds as they fall in value, which is exacerbating the cycle. Meanwhile, meatpackers have the luxury of waiting for cheaper prices, which is making them less aggressive about buying.
One of the few bright spots in the cattle industry is that corn is near a seven-year low at $3.15 per bushel. This lowers a cattle feeder’s expenses, but it can also hurt him as low corn prices allow his competitors to cheaply add weight to their cattle, increasing the overall meat supply and driving prices even lower.