Cattle Market Reports and Analysis
Higher asking prices meet resistance and feeders find security in cash/futures basis strength. A similar standoff pattern shapes up for this week.
Record prices bring consumer demand to the forefront, particularly in an inflationary economy where consumers are financially pinched and we must remember demand includes both the willingness and the ABILITY to buy.
Lawmakers sent a letter to Ag Secretary Tom Vilsack, urging him to reverse the U.S. Department of Agriculture’s (USDA) decision to cancel or discontinue several National Agricultural Statistics Service reports.
March beef exports were down 8.2% from last year following an annual decrease in 2023. Meanwhile, March beef imports were up 10.6%.
Cattle markets have settled into the knowledge that HPAI H5N1 avian influenza has relatively minor impacts on cattle and has no human health implications for meat or pasteurized dairy products.
After a mostly sluggish April, market-ready fed cattle saw a solid rally in the North and steady money in the South. Futures markets began to look past the psychologically bearish H5N1 virus news.
While the heifer percentage in feedlots remains above the average of the past ten years, the decline from January to April is an encouraging sign that heifer feeding is perhaps slowing.
Cash cattle markets edged lower and while wholesale beef and futures markets were mixed. Cattle on Feed totals were up for the seventh consecutive month and placements lower than expected.
Cattle and hog feeders are benefitting from dramatically lower grain and feed costs this year while live animal sale prices are higher. Profit margins for both species have doubled in the past month.
Carcass weights have trended heavier for over 60 years with steer carcass weights increasing by an average of 4.0 pounds per year, up over 240 pounds from 660 pounds in the 1960s to over 900 pounds in recent years.
Declining cattle futures provided leverage for packers to collect inventory with softer bids.
Negotiated cash cattle prices moved lower again under pressure from sinking futures markets. The red-hot hamburger market kept pushing most utility cows higher.
USDA is Discontinuing A Major Cattle Report, And it Could Now Spur More Volatility For Cattle Prices
USDA National Agricultural Statistics Service (NASS) announced it’s canceling the July Cattle Inventory Report. In the announcement, NASS blamed budget cuts from the most recent appropriations bills.
NASS said the decision to discontinue select surveys was necessary given appropriated budget levels. NCBA noted its objections to the plan.
Finished cattle, feeders, calves and the futures markets were all in retreat as the HPAI event becomes the latest beef industry black swan.
The latest data on steer weights shows 23 pounds heavier than a year ago at 922-pounds, record-high for the first two weeks in March. That’s a sharply higher trend line in a time when weights historically trend lighter.
Packers were quick to act on last week’s falling futures, but cattle feeders held firm in a week that could have moved much lower.
Cattle futures traded on both sides of unchanged before heavy selling emerged in the afternoon sending prices sharply lower into the close.
News of HPAI in dairies in the southern plains gave futures bears reason to react early last week, and the negative psychology spilled over into the cash trade as all regions traded lower.
Cash fed cattle prices reached new record highs in all feeding regions last week, but the trade was a bracket-buster for packers who were forced to pay up as wholesale beef prices declined.
Cattle feeders displayed their market leverage this week as active trading pushed prices to new record highs. Friday’s Cattle on Feed report identified another strong placement increase.
Mexico has become one of the major beef import sources for the U.S. as beef trade evolved from simply supplementing deficit beef production in Mexico to bilateral, product specific trade between the two countries.
All classes of cattle sold at higher prices for the week and most are at or near record highs. Supplies of all classes remain extremely tight.
Lean beef trimmings, a key component of ground beef production, have rallied significantly, with the price of 90% lean trimmings quoted over $317 per cwt. the first week of March, an all-time record dating back to 1978.
Beef packers slow harvest lines and scramble for inventory as they attempt to keep a lid on cash prices.
Negotiated cattle prices moved higher again as supplies continue tightening. Packers are caught in significant margin squeeze with marketing leverage continuing to favor cattle feeders.
All classes of cattle and futures prices moved higher for the week ending March 1. April live cattle closed at the highest level since early November.
Futures markets lend support to cash as packers looked to add inventory ahead of Cattle on Feed report.
Cash cattle posted solid gains this week as futures prices closed the week with four-month highs. Friday’s Cattle on Feed report met expectations with the exception of placements, which were higher than anticipated.
The January thaw across most of the cattle feeding regions helped spur the year’s first weekly gains for market-ready cattle. The rally was noticed by traders in Chicago as futures markets posted 10-week highs.