FEEDER cattle and feed grain prices are usually inversely related, meaning when one increases, the other decreases and vice-versa. There are two main reasons for this.
Firstly, both these commodities react differently to weather conditions, MLA analyst Tim Jackson said. In a drought, grain is scarce due to poor harvest yields, whereas cattle turnoff increases during drought as producers sell cattle given the lack of available feed.
Secondly, they are the two largest cost inputs for feedlots, meaning that changes in the price of one can affect demand of the other, which in turn affects…
