Packer Inventory Determines Cash Market Outlook

The low number of market-ready cattle continue to pull the market forward. ( Consolidated Beef Producers )

Many feeders chose not to sell this week not wanting to give in to a softer cash market.  The cattle that traded in the north and south, found the cash market $4 dollars lower at $122 and $195 dressed. 

Brad Hulett_author
Brad Hulett, market representative, Consolidated Beef Prooducers, Inc.

Over the past several weeks, feeders have marketed cattle out front to take advantage of the current market. Though the packer has this additional inventory, they may not have enough to stay out of the market for long. 

The low number of market ready cattle, and lighter carcass weights from feeders continuing to pull cattle forward, could make it challenging for the packer to fulfill their need for pounds. 

The coming weeks will determine if this week’s decline was a momentary false drop in the cash market, or the beginning of the summer lows.  With several cattle trading for $122 between last week to the first week in June, it is difficult to think that feeder’s would take anything less than steady money for the next three weeks. 

Packer participation in this week’s trade, should give us insight to the packer position on inventory, and potentially, where we are going in the cash market.