Markets
John Nalivka of Sterling Marketing shares his weekly Beef and Pork Profit Trackers, giving us a deeper look at what’s going on in the markets.
Negotiated cash cattle increased an average of $2.20 per cwt. the week ending Sept. 28. Farrow-to-finish hog producers found positive margins of $8.55 per head last week, down $1.75 from the previous week.
Harvested fed steer and heifer head counts outpaced the same weeks in 2023, with 501K and 492K in the past two weeks.
Beef packers saw profits drop $54 per head to a loss of $18 per head. Pork packers saw average profits of $20 per head, down $2 from the previous week.
Negotiated cash cattle increased an average of $1.18 per cwt. the week ending Sept. 14 and profit margins dropped by $13 per head to an industry average of $130.66 per head, according to Sterling Marketing. Farrow-to-finish hog producers found positive margins of $16 per head last week, down $2.91 from the previous week.
The key is demand and managing feedlot break-evens as cattle numbers continue to decline, says John Nalivka, president of Sterling Marketing Inc.
Beef packers saw significant margin improvement the week ending August 30, while pork packer margins, though down from the previous week, were sharply higher than a year ago.
Current supply metrics have boosted the value of Select carcasses as a reflection of less lean trim with lower cull cow volume. Fed cattle sector still finds highest return as carcass quality increases.
Last week’s substantial drop in the breakeven feeding cost for feeder cattle placed on feed last week is significant to the market outlook, says John Nalivka, president of Sterling Marketing Inc., in the latest Sterling Profit Tracker.
Negotiated cash cattle retreated an average of $2.31 per cwt. The week ending Aug. 17 and profit margins dropped by $79 per head to an industry average of $167 per head, according to the Sterling Beef Profit Tracker.
Beef exports continue to follow current market conditions of declining beef production and higher domestic beef prices.
A look beyond last week’s headline news surrounding the sell-off in both Live Cattle and Feeder Cattle futures.
Cash markets found their footing following some positive news when HPAI testing of ground beef found no sign of the virus. Futures turned positive and cash cattle traded higher for the second consecutive week.
Similar to last year, packers have idled the harvest pace lower in an effort to keep prices in check. The strategy favors more late-week trading.
Cash cattle traded lower in all regions for the first time in more than a month, but futures prices rose Friday to the highest levels in nearly four months.
Calling the packers’ bluff, cattle feeders held out for higher bids and were rewarded with the highest prices in over three months.
Fed cattle broke through $180 barrier this week, establishing the highest prices since the week ending November 3 and cattle feeders continue to gaining leverage.
Bullish traders showed their hand at the CME pushing April LC to a three-month high and helping spur a solid rally in cash cattle markets. Inventory report confirms tight supplies will remain for the near future.
Packers came into the market last week ready to add inventory after winter storms disrupted harvest schedules the previous two weeks.
Negotiated cash trade finished the week in a standoff with few sales and little price movement. Feeders and packers both look to benefit from improving winter weather and pen conditions this week.
A mid-January deep-freeze failed to deliver any bounce to cattle markets as packers appear flush with formula and contracted inventories. Friday’s Cattle on Feed report fell within expectations.
Brutal winter weather disrupted cattle markets and significantly curtailed cattle harvest in western Kansas. Cash cattle trades were steady to lower while wholesale beef prices posted a significant rally.
After reaching a peak price in August, cull cow and bull prices moved higher to end the year on a positive note.
A year ago feeders were concerned about weathered cattle and tough pen conditions and how at times it would be the motivation for sellers to take the market. It’s eerie how not much has changed in that sense.
The beef market is set to rapidly adjust to changes in consumer buying habits. This removes demand pressure from ribs and tenderloins, realigning the contribution of those cuts to a smaller percentage of carcass value.
2023 was a lower year for all the grains as the market went through a commodity reset similar to 2013. What’s ahead for 2024?
The final week of 2023 found at least three bidders in the market in multiple regions.
AgDay TV Markets Now: Brad Kooima, Kooima Kooima Varilek, recaps a record year in the cattle market and discusses if new highs are possible in 2024.
Feedyards saw higher cash cattle bids for the second consecutive week as the market closed the year on an upswing. Futures prices finished the week lower.
Volatility contributed to a strong basis early last week and cash traders benefitted by waiting until late week to sell cattle.