Mackey: Packers Pulling Out the Stops to Gain Control
Higher Highs— a common theme over the past few weeks. Cash and Futures have eclipsed levels not seen since October of 2014. Friday’s report had 84,554 head in negotiated trading, 17,000 head under the big week before. When the grids are added back in, the deficit isn’t as large, but packers are still behind.
The south saw trade from $175-$176 and the North saw trade $182-$184 live and $290 per cwt. dressed, with a few outside regional trades higher yet. The Regionals are making a bigger shift in the market verse most majors. Without the captive supply they are buying more open-market cattle than some of the industry’s big four.
The question that looms, “Is there more to come?” No one will have the answer to this, but one thing we know, the packer is pulling out all the stops to ensure that he gets control. Packers continue to haul cheaper inventory to regions grinding higher and peel back harvest to stall the market. This is all friendly, one does not cut kills with peak demand on the forefront. Last week’s harvest was 613,000 head. That’s 10,000 head larger than the week previous, but well under a year ago. There simply isn’t enough supply to go around. The Cutout was up $11 last week. Looking ahead, the Cattle on Feed report out Friday should add more fuel to this market’s fire.
