Fed Cattle
Packers came into the market last week ready to add inventory after winter storms disrupted harvest schedules the previous two weeks.
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.
The first system to make feeding recommendations via artificial intelligence (AI) and machine vision has been announced by Precision Livestock Technologies.
Technology and robust data management will allow more cattlemen and smaller processors access to USDA graders to remotely assign official quality grades for beef carcasses, providing an opportunity to increase value.
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.
A mid-January deep-freeze failed to deliver any bounce to cattle markets as packers appear flush with formula and contracted inventories. Friday’s Cattle on Feed report fell within expectations.
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.
Winter weather dominated livestock markets the second full week of the year with slowing harvest and transportation. Cattle and hog prices were steady and margins improved modestly, yet losses remain significant.
Critics of U.S. beef’s trade activity claim imports distort domestic cattle prices. But actual data tells a much different story.
Severe winter weather across cattle feeding country reduced weekly harvest and damaged feeding performance. Cattle feeders will seek higher prices this week.
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.
Cash fed cattle prices traded at higher prices the first week of the New Year despite a significant decline for wholesale beef prices.
The beef market is set to rapidly adjust to changes in consumer buying habits. This removes demand pressure from ribs and tenderloins, realigning the contribution of those cuts to a smaller percentage of carcass value.
The final week of 2023 found at least three bidders in the market in multiple regions.
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.
LRP insurance is straightforward, versatile, and makes risk management readily accessible to producers. And that’s more important than ever; record prices translate to heightened equity risk.
USDA’s December Cattle on Feed report totaled over 12 million head for the first time since May of 2022.
The shift to tighter fed cattle supplies and smaller slaughter head counts pushed year to date (YTD) fed cattle prices up 22% on average for the year.
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.
Futures markets posted solid gains for the week, but cattle feeders continued to lose marketing leverage as cash prices declined a sixth consecutive week.
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.
Another round of falling futures produced another round of lower cash bids. Cattle feeders now offer their smallest showlists of the year.
Four grants have been awarded by ICASA totaling roughly $1.15 million to identify why liver abscesses occur and develop diagnostic tools to enable informed decision-making to treat the condition.
Cash cattle and wholesale beef prices continued their fourth quarter retreat and record heavy carcass weights suggest cattle feeders have lost marketing leverage.
Cattle feeders and beef packers both printed closeouts with red ink last week, slight advantage packers. Pork producers also operated underwater but pork packers saw improving margins.
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.
A summary of 15 years shows how feedlot production continues to develop and reflect changes in cattle genetics and feeding technology and management.
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.