Fed Cattle
Higher asking prices meet resistance and feeders find security in cash/futures basis strength. A similar standoff pattern shapes up for this week.
As replacement heifer inventory increases the percentage of heifers in the fed slaughter mix declines. That decline in the recent cycle was especially sharp, dropping below 34% for three years.
Cattle feeders maintain a strong bargaining position despite a softer futures market. Feeder cattle and calves trade mostly lower.
When it comes to trade – especially for the beef industry - if you’re hearing a tariff siren, it’s likely a false alarm. Tariffs are a solution in search of a problem.
U.S. beef trade is a complex issue involving significant imports of lean trim and valuable exports of high-quality cuts. Without imported lean trimmings for the hamburger market, U.S. cow slaughter would need to double.
Harvest picks up and packers are now finding themselves trying to bridge the gap between yearlings and calves. Smaller showlists create a challenge for packers.
Cash markets found their footing following some positive news when HPAI testing of ground beef found no sign of the virus. Futures turned positive and cash cattle traded higher for the second consecutive week.
Beef carcass cutout values have continued a precipitous decline since mid-March, tracking a 5% lower trend in that period. That is firmly against the trend charted in the previous three-year average.
Cattle feeders and pork producers both saw higher cash prices for harvest-ready animals last week and margins improved accordingly. Packers continue to struggle with negative margins.
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.
Cattle and hog feeders find dramatically lower feed costs compared to last year with higher live anumal sales prices. Beef packers continue to struggle with negative margins.
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.
Innovative Livestock Services, Inc., announces leadership change for the company that represents eleven feedyards
Over the past five weeks the combined Prime and Choice carcasses harvested totaled 84.7%, a six percentage point increase over the September low of 78.7%.
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.
The margin spread between packer losses and feedyard profits expands as wholesale beef prices continue their retreat. Pork producer profits continue increasing.
Beef exports continue to face headwinds as beef production decreases and beef prices increase in the U.S. market. Beef imports are dominated by imports of lean processing beef to supplement supplies of nonfed beef.
Under pressure from negative margins, packers will continue to play their games but their activity last week led to the biggest harvest rate in seven weeks.
Kay Russo, DVM, Novonesis technical services manager for dairy and poultry, emphasized the situation is rapidly evolving and more clarity will come with time as researchers learn more.
Finished cattle, feeders, calves and the futures markets were all in retreat as the HPAI event becomes the latest beef industry black swan.
As cattle are fed to heavier end points, the incidence of BCHF is increasing. The beef industry is stepping up to help producers and veterinarians make production and selection decisions to reduce the occurrence of BCHF.
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.
Market cow prices have increased significantly as demand has grown for product in the nonfed beef market, and the supply is tightening faster than that of fed beef.
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.
Does more negotiated cash cattle trading benefit feeders or packers? An evaluation of packer gross margin provides some perspective.
Does an increasing negotiated cash cattle trade lead to higher overall prices? Here’s what the data reveal about this most tenuous topic.