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.
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.
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.
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.
Despite a state-wide drought and market challenges into fall, average prices for Show-Me-Select heifers posted healthy prices at six sanctioned sale locations.
Negotiated cash trade finished the week in a standoff with few sales and little price movement. Feeders and packers both look to benefit from improving winter weather and pen conditions this week.
The onset of severe cold temperatures and snow in a broad spectrum of cattle feeding regions will pull fed cattle production down. Beyond the reduced weekly slaughter head counts, carcass weights are set to plunge.
Severe winter weather across cattle feeding country reduced weekly harvest and damaged feeding performance. Cattle feeders will seek higher prices this week.
Brutal winter weather disrupted cattle markets and significantly curtailed cattle harvest in western Kansas. Cash cattle trades were steady to lower while wholesale beef prices posted a significant rally.
There remains a lot of noise around the issue of LRPs in the cattle markets. That was best described by one of my readers last week: “[most of the critics] don’t even understand the facts, let alone the myths.”
Economics and the impact on weights – both longer-term and decisions based on short term factors will play an important part in determining beef production in 2024.
A year ago feeders were concerned about weathered cattle and tough pen conditions and how at times it would be the motivation for sellers to take the market. It’s eerie how not much has changed in that sense.
Feedyards saw higher cash cattle bids for the second consecutive week as the market closed the year on an upswing. Futures prices finished the week lower.
Increased packer margins in recent weeks has encouraged a quicker chain speed. That speed likely will not be supported through the end of the year with two Holiday shortened weeks.
LRPs and options are essential risk management tools, but coffee shop talk suggests LRPs are driving the cash market lower. Let's examine the data to keep the discussion measured and objective.
Cattle feeding margins fell deeper into the red while packer losses doubled from the prior week. Pork producer margins have now printed red every week for the past year.
Under current market conditions beef exports are expected to decrease and beef imports should increase...exactly the outcome observed thus far in 2023, says economist Derrell Peel.
Cash cattle and wholesale beef prices continued their fourth quarter retreat and record heavy carcass weights suggest cattle feeders have lost marketing leverage.
Few things in cattle market trends are entirely predictable but the fact that carcass weights peak in November is as close to a sure bet as one could identify.
Some blame the recent rout in the futures markets on LRP (Livestock Revenue Protection), a claim that is wholly unsubstantiated. A look at the data confirms LRP blame really is a smoke monster.
Declining cattle futures prices continue to pressure cash prices. The cheaper inventories are working to pad the packer's pocket as evidenced by a few plants operating on Saturdays.
Market-ready cattle prices have rolled back $10 per cwt. since the end of October and average carcass weights have increased to all-time highs, a sign feedlots are not as current as previously expected.
There seems a belief that speculators – either too many or not quite enough – are solely responsible for driving the market one direction or another. But bashing speculators is what people do who don’t like the price.
Cattle futures markets have come under criticism lately for their volatility. A common theme is there are "too many shorts" or "too many longs." That ignores the fundamental fact that futures markets must come in pairs.
A snowballing effect from several factors has led to the present market flush in cattle futures and provides a stark contrast between emotion and factfulness.
Reported national feeder cattle volumes (auction, direct and video/internet) are up 5.6% year-over-year since Labor Day, with the majority in September which contributed to the large September feedlot placements.
Cash fed cattle prices have increased 4.8% during the month of November in the past five years, yet carcass cutout values have begun the month in a bit of defensive pattern.
Last week saw several feedyards pass on steady bids from packers. Cattle feeders are counting on declining numbers of Choice carcasses to bring packers back with higher bids.
Beef demand has been remarkably robust through many shocks in recent years and continues to surprise and impress despite the nervousness of the industry to the challenges facing consumers.
Cash trade was light as many cattle feeders passed on steady bids. Feeder cattle and calves traded mixed. Live and feeder futures contracts posted weekly gains.
Cattle prices were weaker on the week with volatility in the futures markets and the season's first cold spell on the way. Wholesale beef prices traded higher seasonally.
USDA's recent October 1, 2023, Cattle on Feed report offered a few surprising numbers. How does that report square up with previously released USDA data?
Packers were forced to add to their inventory and pushed prices $2 higher last week. The surprises in the Cattle on Feed report may offer a reason to push prices lower, yet feedyards maintain the upper hand.
Cattle feeders saw $1 to $2 gains in all regions during the week, but a struggling futures market and an unfriendly placement number in Friday's Cattle on Feed report may drag on cash prices in the short-term.
For cow-calf producers, fall is often a time for preconditioning, weaning and marketing calves. While prices will likely be towards the top end this year, could you still be leaving money on the table?
With cattle prices strong, serious inventory issues continue as the USDA is set to release the newest cattle on feed report on Oct. 20. Here's what experts are saying about the upcoming report and herd expansion.
Ground beef is the inexpensive alternative consumers turn to when prices rise. However, the overall decline in beef production means that ground beef supplies will be smaller and prices higher going forward.