Mackey: Packers Grudgingly Pay Up
Packers reluctantly paid higher money last week. Spurred by a stronger board, cattle feeders stuck with their asking prices and saw the market reverse the previous weeks’ trend. The South had the most notable improvement on the week with the widespread $180 per cwt. bid by multiple packers jumpstarting the market and moving volume.
Meanwhile, the Northern market was slower to get going. Packers attempted to work cattle feeders over with bids of $178 live and $288 dressed, before offering steady bids of $181 and $290. Even then, the market was slow to become established. By week’s end at least one major was reported at $292 dressed and live bids from $183-184 per cwt. and outside regional sales at $185 per cwt. That would be $1-2 higher on the week. When it was all said and done, Friday’s negotiated volume was 82,000 head, about 21,000 head behind the previous week. Look for Monday’s number to grow fractionally.
Side note, looking at the price breakdown for the last several weeks. The packer has been successful keeping his grid price relatively unchanged. Feedyards should be cognizant, as the spread is supportive to hang the cattle up, packers aren’t pushing any harder for the grid type cattle. Assessing, at least 2 of the major packers’ behavior, it would be safe to assume their limited involvement has been promoted by grid turn-in cattle.
Looking ahead, cattle feeders will look to push this market solidly higher. Cattle feeders will find confidence in the futures strength signaling better markets later into the year. Packers will continue to push grids to control their needs.
