The cattle market continues to break records with last week’s 5-area weighted average cash price hitting a new high at $216.32, up $3.56 from the previous record set March 21.
Brad Kooima, Kooima Kooima Varilek, says individual sales in the North topped that level.
“We’ve put on almost $10 in the last two weeks on cash,” he says. "$218 was widely traded to a number of different packers last week around here. And not only was it traded, but I know a number of those cattle, nearly all of them, harvested this week.”
Buck Wehrbine, president of the National Cattlemen’s Beef Association, also runs a feedlot in Nebraska.
“Amazing,” he admits. “I sold cash cattle for $217 last week. And for someone that’s been in this business my entire adult life, 45 years, I’m just kind of dumbfounded.”
What’s driving those record prices?
While offset by higher weights, year-to-date slaughter is down 5.8% and last week slaughter was only 555,000 head, down 59,000 from last year, and the lowest level for the week since COVID.
So, historically tight supplies continue, especially in the North.
Kooima says, “The known show lists that I see around here are the smallest I can ever remember, frankly, for any month or any week of any time of any year in the last, I don’t know, 15 years. So that gives you that magic word, leverage.”
The other supportive feature is demand.
Choice beef topped $348 Tuesday, the highest level in two years, as retailers gear up for the grilling season.
Alan Brugler, A&N Economics, says there is no sticker shock yet.
“The consumer, while they may be cutting back in some other areas, is still supporting the box beef price pretty well,” he explains.
Wehrbine adds, “I think what this speaks to what this business has done over the last 20 to 30 years in the quality of our beef.”
Closeouts on fed cattle range from $300 to $500 per head. And the futures and cash tops may not be in.
According to Kooima, “Could I see cash go to $225 for 15 minutes or so? Sure. And then your guess is as good a mine on the basis.”
Feeder cattle futures are also making new highs pushed by the cash index, which is at all time highs at $293.71 and could possibly hit $300.
This has market analysts recommending risk management.
John Heinberg, Total Farm Marketing, says that requires keen risk management.
“You keep floors in and protect yourself and hedges just because this market’s going to get more and more volatile as it gets more stretched in terms of historical prices.”
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