Cash Continues To Slide As Feeders Lack Leverage
Packers continued to keep the trading range wide, last week while lowering their bids. Trade in the South ranged from $100 to $118 per cwt. Many producers passed on bids from packers due to price. Many believe current bids are lower and not reflective of where producers see the value.
Feedlots are caught in a dilemma of trying to find a balance between taking a lower bid to get cattle moved now so they don’t add to the current backlog. They are also trying to minimize current losses without creating more headaches for later in the season. Still, finding available harvest slots is difficult.
The North continued to follow along with the South, with cash trades at $105 to $118 per cwt., and the dressed cattle selling in a wide range at $170 to $185.
Packers appear determined to keep their margin near all-time highs. As boxed beef prices continue to falter, packers continue to use their leverage over the cattle feeder and force cash prices lower. Most producers in the cash market still have no option but to take any bid the packers will offer. As this continues feeders will be pushed farther and farther into the red.
