The traditional market signals are there but these aren’t “traditional times.”
Everyone is talking about the bull-sale averages that have been posted early in this year’s bull sale season. It’s hard to get your mind around some of the prices being paid. One specialist says he’s seeing average bull prices that are $1,000 to $1,500 and more over last year.
With these kinds of prices, you can’t help but start to talk about bubbles. After all, we’re talking about commercial bulls averaging $7,000, bred females over $2,000, and nine-weight steers bringing over $150/cwt.
Yet despite all of these new record price levels, expansion has yet to begin. Feeders and packers are looking at significant losses, and people are beginning to talk openly about the obvious fact that feedbunk and chain capacity just has to be removed. Everyone is expecting expansion to begin – the traditional signals are there – but these aren’t “traditional” times, and there are a whole host of factors that seem to be thwarting expansion.