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Processing capacity, cattle supplies hurting fed cattle prices

An ag economist says high cattle supplies are pulling down fed cattle prices. Purdue University’s Michael Langemeier.

“We’ve got a lot of cattle on feed and we’ve got a limited capacity to butcher those animals and so, long story short there, the fed cattle price is driven by more demand fundamentals and what’s going on in the packing industry than corn price,” he said.

Langemeier tells Brownfield tight processing capacity is narrowing producer margins.

“We don’t have the same capacity today as what we had even 10 years ago,” he said.

However, with less cattle on feed, some ag economists have an improved price outlook for the latter half of the year.