Mackey: Feeders Operating as ‘Market Makers’
In this time of great leverage cattle feeders are finally discovering what it means to be a market maker and not a market taker. Feeders are enjoying the opportunity to market cattle earlier, lighter, and higher than what their expectations were when the cattle were placed on feed. Meanwhile, packers are being forced to operate in a cash market with fewer captives at their disposal. The increased competition has pushed markets to new highs.
The North traded from $188 to 193 per cwt., with volume moving at $190 per cwt. live and $300 per cwt. dressed. The activity in the South was probably the most noteworthy of all trade regions. While Texas was moving cattle at $185 per cwt., Kansas was passing. Kansas has found new leverage with Northern packers looking to freight cattle out. Kansas feedyard owners were able to push their market another $1 higher to $186 per cwt. The industry, as of Friday, traded 165,000 head cash and grid combined. Cattle feeders are finding it advantageous to price cattle for forward delivery. Look for the 15-30 day sales option to grow on Monday.
Looking at the calendar, one questions if the packer won’t look to trim harvest and hold onto some this added inventory as we work toward Independence Day. This will be the time they will look to cool off the market. Harvest for the week was 621,000 head, 50,000 head fewer than last year’s pace.
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.
