Cash Climb is Painfully Slow

Market Alley
Market Alley

The cash market continued its painfully slow climb last week, and many feeders anticipated the gain would be quicker and higher. With costs on the rise, quicker gains in the cash market would be most welcome.  Live cattle trade in the South was $114 last week.  Packers gave the impression they wanted to keep their inventory very light by lack of cash purchases during the week. 

Prices continued to rally for the North producers last week, too.  Most live cattle traded up to $114 with dressed cattle topping out at $180.  Producers in this part of the country will be dealing with unusually cold temperatures over the next week or two. 

Packer behavior could indicate they are shorter bought than they have been for a while.  The evidence of the lack of inventory is the swiftness in recent weeks of the packer pulling bought cattle well before the end of the delivery period of recent.   If the packer just-in-time buying continues, the producer could gain the advantage and swing some of the packer’s margin back their way. 

Brad Hulett is Director, Customer Development & Regional Manager, Kansas at Consolidated Beef Producers , Inc.

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