Cattle Market Reports and Analysis
Cattle feeding losses averaged $83 per head last week, while packers recorded $168 per head profits, according to the Sterling Beef Profit Tracker.
While cash cattle prices slipped only modestly, cattle feeders saw margins erode by $86 per head, falling from an average profit of $38 two weeks ago to an average loss of $49 per head last week.
The cash market for fed cattle last week gave some relief to feeders and overall market sentiment in the wake of the prior week’s $5/cwt. decline.
Losses continued to grow for feedyards and the spread between feeder losses and packer profits only widened with a $1.50 per cwt. decline in cash cattle prices last week.
Beef packer continued with a stranglehold on cattle markets last week, buying a few cattle to fill their needs at lower money and keeping operating margins historically high.
The beef cattle industry will receive $5.1 billion of CFAP funding to partially offset 2020 losses due to COVID-19. USDA expects to begin sign-up in early May and distribute payments by late May or early June.
COVID-19 has temporarily placed a restriction on the number of cattle that can be harvested in a given week. That scenario is usually a recipe for lower prices, but this week’s extremely light fed trade was steady.
Lower grain prices last week helped boost prices for feeder cattle and calves at most auctions across the country. AMS reporters expect grain prices will continue to be a major factor in cattle prices going forward.
USDA’s annual Cattle Inventory report released Friday estimated the total U.S. herd on Jan. 1, 2021, at 93.6 million head, about 200,000 head fewer than in 2020.
Numerous factors are in place that will shape cattle markets for at least the first few months of 2021. The COVID pandemic will continue to limit food service and restaurant demand for beef.
Flow of cattle through feedlots should begin to show more consistent tightening in 2021. The beef cowherd was at a peak in January 2019 and led to a 2019 calf crop that was down 0.7 percent from the 2018 peak calf crop.
Placements in feedlots during November totaled 1.91 million head, 9 percent below 2019. Net placements were 1.85 million head.
President Donald Trump told reporters Wednesday he has asked the Justice Department to look into allegations that U.S. meat packers broke antitrust law.
Here are forecasts for production, imports, exports and per capita consumption of beef, pork and broiler meat in 2021.
A large winter storm is advancing across the central U.S. bringing cold temperatures and some much-needed moisture. Feedlots continued to build inventory during September leading to a record inventory for Oct. 1.
A fall rally in cash fed cattle markets has added $5 to $6 per cwt. over the past three weeks. Feeder cattle remain in moderate demand, but drought conditions across much of the Great Plains is affecting cattle markets.
This first full-week following the Memorial Day holiday delivers signals cattle markets may see a second wave of downward pressure, the after-shocks of the COVID-19 earthquake.
Early week fed cattle sales were steady at $95 to $100 per cwt., and $150 dressed. Friday, however, saw one major jump in and buy a few thousand cattle at $105, $5 higher than last week.
During a Facebook Live address to cattlemen Monday night, R-CALF CEO Bill Bullard outlined four actions his group proposes to “restore balance to our dysfunctional cattle markets.”
Unprecedented volatility in fed cattle markets during March produced a strong increase in negotiated cash sales from feedlots to packers the final two weeks of the month.
The current cattle market situation creates significant disparities between the current supply and demand situation and expectations for coming supply and demand conditions.
Panic meat buying emptied shelves and drove the Choice beef cutouts nearly $48 per cwt. higher. Cash fed cattle were higher, but not at a proportionate level.
Last week’s early winter storm exposed cattle to cold, wet conditions, but also brought much-needed moisture to the nation’s wheat belt reviving prospects for winter grazing.
Both CME cattle futures and cash prices were lower for the second consecutive week. USDA’s cattle on feed report found a record October 1 inventory as September placements were called 6% higher.
Cattle feeders found softer prices and weaker packer demand as last week progressed, driven in part by declines in CME futures prices.
There are many dynamics in cattle slaughter markets in the fourth quarter that will determine total slaughter for the year, but an early analysis suggests a 2.5% decline.
Packers were fairly aggressive in their drive to increase their inventory. Cash traded mostly on Thursday, but packers took on additional cattle Friday at steady money.
Markets will no doubt evolve this fall and producers must continue to evaluate winter grazing potential under dynamic market conditions and profit potential may vary widely.
Cattle prices rallied for the seventh consecutive week, adding $12 per cwt. over that span. Cattle on feed numbers were up 2% Aug. 1, with July placements up 11%.