Mackey: Packers Pay Up To Gain Inventory
The resiliency of cattle feeders last week paid off in a big way. Most of the country saw decent gains of $3 per cwt. live and $4 dressed. At the time of this writing the 5-Area-Volume sits at 142,301 head, cash and grids combined, compared to 105,633 head just a week ago.
The southern market was spurred to action after bids of $147 were refused early week. With sights set at $148 a major packer started to gain traction with a grid bid of $233. Their competitors would push bids to $148 in order to secure their share of the front-end graders. Most of the packers were willing to buy cattle for 2-3 week delivery. In my estimation, that’s prep work for the tighter supplies they face moving forward.
In the North, the cash momentum continued. Encouraged by southern packers pushing on frontend cattle, their northern competitors were forced to raise bids. $152 live and $236 dressed would trade the highest market we have seen in 7 years.
Looking ahead, last week’s 673,000 head kill, the third largest of the year, might just be the medicine to keep this market healthy. Packer margins should find a balance as the holiday rib demand starts its seasonal push. Grade will continue to be the topic of discussion, as we face the tighter supplies over the weeks to come.
A native of Torrington, WY, Brodie Mackey joined CBP 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.
