Mackey: Blizzard Freezes Packer Appetite
Packers in the cross hairs of red ink had their Christmas come early in the form of the season’s first true winter storm. Widespread blizzard conditions compromised kill and froze the packer’s appetite. Last week’s fed cattle market struggled to stay steady. The weekly kill was posted at 629,000 head. That’s 23,000 head fewer than a week ago and 29,000 head fewer than last year.
Sales volumes were good in the East at $248 dressed—a dollar higher than the previous week, and the South—primarily at $155, where kill was not lost by the weather. Texas and Kansas are showing to have traded 9,311 head more than the prior week. Sales in Western Nebraska and Colorado were very light. As of Friday afternoon Colorado had only posted 471 head, 3000 fewer than the previous week. JBS was the only bidder at $156 per cwt., $1 lower than the previous week’s market. Cargill was absent from the marketplace due to their loss of kill.
As most know, when JBS is the only bidder they are more than willing to leverage the situation. Next week's forecast is calling for very cold late week temperatures coupled with high winds. Feeders resisted the lower prices due to the unfavorable weighing conditions in the coming weeks. Most would have looked to move cattle at steady money, but that never came.
Looking ahead, the packers will look to utilize the upcoming holiday weeks to slow the slaughter pace and curb the bids for fed cattle. By the numbers, the packers are short bought and cattle feeders should look to advance their position with higher asking prices.
A native of Torrington, WY, Brodie Mackey joined Consolidated Beef Producers in the spring of 2013 after earning his B.S. from the University of Nebraska-Lincoln. Brodie’s focus at CBP includes customer development, cattle marketing and evaluation in Nebraska, Northeast Colorado, South Dakota and Wyoming. For more about Consolidated Beef Producers visit here.
