Fed Cattle
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.
Beef’s critics see an industry that is corrupt and/or broken with NCBA and packers padding their pockets. The facts tell a different story. Beef is winning the marketplace…and it’s not even close.
Volatility contributed to a strong basis early last week and cash traders benefitted by waiting until late week to sell cattle.
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.
Shifting market dynamics are most succinctly summarized through two factors, fewer cattle and higher prices, that will further entrench themselves in near term trends.
Despite ever smaller feeder cattle supplies, feedlot inventories have temporarily halted the slow decline of the last year with the September surge in placements.
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.
Prices for day-old beef-X-dairy (BXD) calves are often surprisingly high. But what used to be a highly discounted after-thought (straight dairy calves) is rapidly transforming into a meaningful source of production.
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.
Prices across the entire beef complex have reached record levels. Demand remains the key variable, and now may be the time to measure demand through the value of the various cuts of the carcass.
Price-fixing allegations were again levied against America’s largest beef packing companies, this time by a group of small distributors.
Fed cattle trade posted gains last week, but the rally was not incentivized by wholesale beef prices, but rather pushed by limited supplies of ready cattle.
Following a couple of weeks of steady to lower money, fed cattle prices posted advances in all regions last week.
Procurement decisions by feedyards are heavily influenced by vaccination status and current health condition. An “Industry Insights” report from CattleFax and Angus Media provides useful insight on current trends.
As the board moved on its second leg down last week, packers motivated sellers with additional kickers on their offers.
Outside factors pressured cattle markets through most of the past week before futures and wholesale beef prices rebounded on Friday. Market fundamentals remain positive for cattle going forward.
More days on feed means more opportunity for something going wrong – ultimately ending in increased death loss. Preventive illness management before arrival is more important than ever.
Packers applied the brakes and cattle slaughter declined another 13,000 head last week and capacity utilization dipped 9%. Pork producer margins print $7 in the red.
Magnum Feedyard, Wiggins, Colo., was recognized as this year’s Feedyard Commitment to Excellence award winner at the Certified Angus Beef Conference in Las Vegas.
Cattle futures posted weekly losses including a technically bearish weekly low close in December live cattle. Cash markets were weaker, but strong cash fundamental remain in place.
While the market average trading range has narrowed from the recent historically wide range, the total market average in the six-state region has priced in a fairly tight range in the low to middle $180’s since June.
Cattle futures rallied to all-time highs on Friday after Thursday’s sell off, supporting negotiated cash prices that reported mostly steady for the week.
Agriculture is changing rapidly; that inherently creates tension. However, producers who operate believing “success is within my control” are the ones most likely to succeed amidst the turbulence.
Congestive heart failure is estimated to cause 4% of feedlot mortality causing significant economic losses to feedlots as the majority of these deaths occur late in the finishing period.
The beef demand success story of the past is also the industry’s roadmap for the future, said speakers at this year’s Feeding Quality Forum.
As the futures continued to grab new ground throughout the week, cattle feeders continued to find confidence in higher asking prices.
KSU economists said data reviewed clearly demonstrates that sending clear value signals to producers through premiums for high quality carcasses and discounts for less desired quality has transformed the beef industry.
Market leverage remains solidly with cattle feeders, but packers continue working their options to hold prices in check.
America’s beef producers are optimistic about the future, and the state of today’s industry is strong. Those are two highlights from the 2023 Drovers State of the Industry survey and reported in this special section.
Last week I learned I’m a 12-percenter, and if you’re a Drovers reader it is likely you are a 12-percenter, too. That’s not good, at least according to those who would regulate our dietary choices.