Fed Cattle
The Grinch is writing closeouts ahead of the holidays as cattle and hog profit margins tumble to their lowest point since the summer of 2020, just months into the COVID pandemic.
Working off a big trade the previous week and slowed production, packers were reluctant to purchase cattle but the futures market took a dip and buyers stepped in at steady money and gathered inventory.
Eight beef packing projects are in various stages of completion that could add 10% to total industry capacity; is it needed? What potential headwinds might these ventures face?
Based on numerous data sets, cattle inventories will continue to tighten, but with mixed signs of stabilization. Expansion and retention patterns will be monitored this fall with confirmation in January 2025’s inventory report.
Current supply metrics have boosted the value of Select carcasses as a reflection of less lean trim with lower cull cow volume. Fed cattle sector still finds highest return as carcass quality increases.
USDA released cattle on feed numbers for feedyards with more than 1,000 head totaling 11.1 million.
Looking below the tip of the iceberg is helping the beef industry better understand and address root causes of health problems in populations of cattle.
Through this project the researchers were able to quantify the degree to which breeds and sires differed across geographical locations and management practices.
A look beyond last week’s headline news surrounding the sell-off in both Live Cattle and Feeder Cattle futures.
The largest feedyard north of the Rio Grande is under construction allowing Blackshirt Feeders to combine data, technology and innovation in a closed loop aligning dairies and semen providers with the feedyard.
Last week’s market reached new all-time highs and asking prices will be higher this week.
Cash cattle trade was called light with prices rallying near, but not reaching, the $2 summit. USDA’s Cattle on Feed report found larger-than-expected May placements.
Cash prices in the North surged higher on active trade volumes while the South posted modest gains on light to moderate volume. Feeder cattle and calf prices were mixed.
Little change was found for livestock feeders last week as near identical week-to-week market prices held margins solidly in the black. Beef packers saw modest improvement with higher wholesale beef prices.
The outside trades of $186 in the South and $193 in the North are a telling sign that leverage is there for the cattle feeder. Given the chance to capitalize with multiple bidders the market should respond favorably.
Aside from the added carcass tonnage, the leap in carcass weights - driven by extra days on feed - has generated a noted shift in carcass marbling and quality grade achievement.
Increased steer and heifer carcass weights are offsetting decreased slaughter to result in a fractional increase in fed beef production for the year to date with significant increases in recent weeks.
Packers reluctant bidders as futures remain significantly discounted to cash. Feedyards content with standoff late in the week.
Beef is winning, and camera grading in packing plants is helping ensure the quality and consistency specific brands require is being met. That, in turn, is helping beef gain market share.
After briefly exceeding $400 per head, cattle feeding margins tumbled $75 last week, but the balance didn’t go to the packer as their losses increased. Pork margins held firm.
Cash prices leaked $1 lower but Friday evening trades suggest packers still scramble to meet their needs and are willing to add freight to do so.
Fed cattle trade lower for first time since mid-April; feeder cattle, wholesale beef prices continue push higher. Holiday beef clearance called good among strong demand.
The use of camera grading in America’s beef plants has improved the accuracy, precision and consistency of grading from plant to plant and from lot to lot of cattle, regardless of where they were harvested.
USDA’s Cattle on Feed report for May 1 found 11.554 million head on feed, down 1% and the first year-over-year decrease in feedlot inventories in eight months.
Cash cattle prices trade higher for a fifth consecutive week and on feed inventories continue to shrink seasonally. Cattle on feed numbers matched pre-report estimates.
A solid rally for cash fed cattle coupled with declining total feeding costs helped boost cattle feeding margins nearly $85 per head above the previous week. Pork margins now over $40 for the fourth consecutive week.
Shorter production and processing schedules have produced the desired effect for packers – a rally in wholesale beef markets. Feeders gain more marketing leverage.
Wholesale beef prices staged an impressive rally this week, leading the cash and futures markets higher. Packers’ marketing leverage remains elusive.
The race towards expansion of the cow herd isn’t likely to start in 2024. That holds some important implications as the industry shuffles around for supply in the years to come.
Livestock feeders find solid profits as the summer grilling season begins. Beef and pork packers continue to struggle with negative margins.