Mackey: Packers Plot to Preserve Profitability
Packers have squeezed everything from the market to remain profitable. We have seen them utilize basis for extended delivery, freighting cheaper inventory to areas of regional cash strength and coupling that with a snails pace for harvest.
Trade for the week was completed at mostly lower levels. In the North, $176 to 180 per cwt. was the live range and $279 to $281 cwt on the dressed side. The South traded for mostly $172 cwt. This marks the second week in a row where we have seen at least one packer offering different price levels for calf-feds to old crop cattle and varying bids for different delivery periods. It’s great for the industry to be able to sell cattle at a price, it's how we remain current. When the report comes out Monday, we will see just how successful the packer is becoming in building his inventory.
Harvest at 623,000 head is relatively unchanged from week-to-week, but 15,000 head behind a year ago. The slow harvest and lighter carcasses have shortened the beef production and bolstered the cutout to a $309 per cwt. level.
Looking ahead, we have a good run of beef consuming weekends ahead of us. Packers should normalize harvest and work through some of their position.
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.
