Three Things Beef Producers Need To Be Thinking About; Why Are Diesel Prices So High?

We start this episode out with a look at three things beef producers need to focus on heading into summer. We pivot to news about why diesel prices are so high, and how long they will stay there. We wrap up with a look at labor markets. 

Transcript

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Hello everybody and welcome to Cat BDC and back with a quick update on the cross tag and financial markets. Today is Thursday, May 7th, 2026. You've got your uh three articles teed up for today. We're gonna focus on what's going on and what to look forward to in the beef market, why the hell diesel price is so high, and then a look at jobs data. So let's get to it. I want to start off at DTN Progressive Farmer with Shaylee Stewart. In her article today, she pointed out three things to consider as you look forward in the months ahead. She says drought and its consequences should be at the front of your mind, with much of the U.S. affected by drought to one degree or another. It's worth considering how drought could affect your operation in the next month, the next three months, the next six months, and so forth. For some producers, unfortunately, that could mean selling pears early this year, as they simply don't have the grass to run them on. For others, that could mean selling some less desirable stock to keep stocking rates low on vulnerable grasslands. The current drought situation is current concerning for one key reason. The high plains prime growing season runs from April through June. Yet above normal moisture isn't expected until after that, later in the summer, by the time that rainfall arrives, it might be too late. The next point is calf marketing. Before you know it, it's going to be time to market your 2026 calf crop, and you need to have some strategy in place so you can do so wisely and maximize your gains. While it's crucial to get water turned on and calves branded right now, you also need to consider how you plan to best market your calf crop because the industry's first big feeder cattle sales will be in about six weeks. Speaking of marketing, that's the third point. Market remains strong and is not likely to change in the immediate future. Strong beef demand continues to provide support, and if drought cont conditions don't improve, cow herds' ability to expand in the coming months could be negatively affected. Either way, market leverage would remain in the hands of cow calf producers. What we remain certain is that the bull market will fade and prices will soften at some point. It's vital that everyone has their house in order to pivot and adjust for when that time comes. Now let's switch over to AgWeb.com in an article from Tyne Morgan. On Tuesday, President Trump stated that high gasoline prices are, quote, a very small price to pay, end quote, for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will come crashing down once the war ends, but for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs going into this year. To start the week, diesel prices went on another run with the national average diesel price just twenty cents away from reaching a new all-time high. Across the country, there are a number of states that are waiting to get to that all-time high. About six states are already seeing national average price of diesel reach record highs. From the Great Lakes to the wet co west coast, roughly a half dozen states have already smashed previous records as a late April dip and prices quickly faded and a fresh sur fresh surge took hold. What will bring relief? Well, that depends on the situation in the war, and of course that pesky Strait of Hormuz. If the strait opens and everyone plays nice, prices will start falling in about forty eight hours. But in the article, Patrick De Hahn, who was head of petroleum analysis at Gas Buddy, says the rate of decline will be slow, meaning prices probably won't be back to pre-war levels yet this year. Get the full information in the article on agweb.com. Finishing out in financial markets, we turn to Reuters. U.S. private payrolls posted their largest increase in fifteen months in April, pointing to continued labor market stability, even as the conflict in the Middle East clouds the economy's outlook. Labor market remains in a low hire, low fire state, though economists are warning of downside risks as the US Israeli war with Iran finds uh fans inflation. The latest sign of labor market stability in the ADP's national employment report on Wednesday bolsters financial market expectations that the Federal Reserve will leave interest rates alone going into 2027. The broad increase in payrolls was led by the Education and Health Services, which added 61,000 jobs. Construction employment rose by 10,000, but professional business services shed eight thousand jobs. Despite the war disrupting shipping in the Strait of Hormuz and raising commodity prices, there has been no marked pickup and layoffs. Government data on Tuesday showed there were 0.95 job openings for every unemployed person in March versus 0.91 in February. Non-farm payrolls likely increased by 62,000 jobs in April after rebounding 178,000 in March, which was based on a survey of economists by Reuters. Private payrolls are forecast to have increased by 75,000 after surging 186,000 in March. Unemployment rate is expected to have held steady at 4.3%. Well, that's all for now. As always, thanks for tuning in to Chat BBC. Leave a comment, share, subscribe, tell all your friends. I'll be back tomorrow with more business news across the A financial market and like the first time.