Mackey: Packers 'Not Doing You A Favor'
Friday’s negotiated cash cattle volume report had a weekly total of 102,052 head trading at levels never before seen. The market is functioning perfectly.
As the supply has tightened the demand has created competition in all primary trade regions. The South was first to see $170 per cwt. bid and buy cattle, but those in KS that followed the activity in the North passed and stuck with their higher asking prices, ultimately, squeezing an additional $2 cwt out of the bid to trade at $172 per cwt. The North had a range of trade from $172-177 cwt. Multiple buyers were reported at the upper end of the range, all wanting their share of the inventory.
Packers have been looking for control of the market and have throttled back the harvest. Week to date slaughter is 603,000 head, off 48,000 head from the week previous. This should provide packers short-term relief with rising beef prices. Peak demand season is just in front of us and packers will need the tonnage that has already been drastically impacted due to our long winter.
Looking ahead, the higher prices will continue to pull cattle into this time slot.
Packers will leverage today’s market for future delivery. Do not be misled. They are not pricing them today for future delivery to do you a favor. They will look to use that inventory to idle the market as they work ahead.
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.
