Beef packers could be moving into a period with smaller inventories, which may prompt them to push prices higher. CME futures prices will again have an impact on the cash trade.
U.S. farmers are facing a changing scenario this year. From wet conditions impeding planting in 2020, to now drought concerns creeping in, one analyst thinks weather could be a major market mover in 2021.
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.
Cattle feeders were left on the sidelines as every other cattle/beef market segment saw a price rally. Futures markets set new highs, but cash cattle have not reached $112 for seven months.
Jan. fed cattle prices are normally choppy and we’re seeing that pattern in 2021. A primary difference, compared to 2020, is that last week’s average price is $14/cwt. lower, the same discount as the 5-year average.
Driven by higher estimates for pork, the China total meat import forecasts were revised up for both 2020 and 2021, according to the USDA Livestock and Poultry World Markets and Trade report.
The onset of the COVID-19 hit the livestock industry especially hard. A sudden loss of demand caused prices to plummet. But thanks to the ability to pivot quickly, livestock producers showed resilience in 2020.
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.
Cattle feeders gained enough leverage to push negotiated cash cattle prices higher during both holiday weeks as 2020 drew to a close. Supplies of fed cattle will tick lower during the first quarter of 2021.
