Beef production slowed to a virtual standstill in the South due to extreme winter weather. Heavy demand on electricity and natural gas limited packers from running at capacity, and their need for inventory was limited.
Cash cattle markets continued its painfully slow climb higher last week, and most feeder anticipated the gain would be faster. Feedyard costs are on the rise, and any gains are most welcome.
Cattle feeders showed they have the resolve to fight for higher bids during last week’s cash cattle trade. The market rallied $3 as the futures market continues to suggest better days ahead.
On-feed numbers indicate that packers could be running low on committed cattle, which should force some packers back into the cash market in the coming weeks.
Even as last week’s prices were steady, it should be noted packers have been buying cattle for several weeks out, which is not behavior that would suggest packers feel that the market is going to be softer.
Cattle feeders found higher prices as 2020 came to a close, but their ability to push the market higher may hinge on how Live Cattle futures perform in the first weeks of the New Year.
All packers were active players in all regions in the days leading up to the Christmas weekend and prices rallied $2 per cwt. accordingly. Feeders reported good clean-up throughout the region.
Cash cattle in the South traded steady, and futures contracts had a decent week but packer needs during the holidays seem to have more of an effect than the futures market.
