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.
With the opportunity to visit a number of cattle feeding operations and learn a bit about how cattle feeding works in this unique environment, Dr. Derrell Peel of OSU shares his experience from his recent trip to Canada.
Cattle feeders and packers were in a standoff most of the week with cash trading only moderate in all regions. Cattle feeders are in a good position as inventories and carcass weights declining.
Focusing on carcass quality can allow feeder cattle buyers to factor in higher returns based on better-than-projected feedlot performance and/or carcass quality premiums than average.
More Hereford breeders and commercial users of Hereford genetics are discovering the feedlot and carcass performance of their genetics through various American Hereford Association (AHA) programs.
Cash cattle markets traded modestly lower in another week of lackluster activity. Northern regions experienced adverse weather conditions added stress to cattle and reduced weights.
Cattle markets traded modestly lower as slaughter levels recovered from the holiday-shortened schedules. Wholesale beef prices traded lower for the week, but Live Cattle futures ended on an up note.
Construction is expected to begin this year for Cattlemen's Heritage Beef Company, a 2,000-head per day beef processing facility south of the Omaha/Council Bluffs metropolitan area.
The new year looks to contrast with last year with noticeably tighter cattle numbers, especially at the feedlot level, driven by previous herd liquidation and sharply lower feeder cattle supplies.
Cattle feeders and packers were again locked in a standoff last week negotiating prices for fed cattle. The tug-o-war continues this week with cattle feeders’ leverage growing.
Cash fed cattle traded steady on the week, but further gains in the wholesale beef market gives cattle feeders the incentive to stick to higher asking prices in the short run.
In this time of growing leverage, feeders should adopt a New Year’s Resolution, “I will not sell on the first bid,” as evidenced by the Eastern feeder’s ability to resist initial offers of $248 and trade at $252.
Drought pushed more cattle into feedlots earlier this year and kept feedlot totals higher for longer, but the latest on feed data shows numbers declining.
Wholesale beef prices are running $20 per cwt. higher than the same week a year ago, with last week's blizzard one factor in the rally. But retail demand for a shrinking supply will support prices into the New Year.
Beef packers saw per head losses nearly double last week as wholesale beef prices tumbled $7 per cwt. lower. Pork processors are also found negative margins and producer margins remain short of breakeven.
Country-of-origin labeling for beef proved to be unproductive and ineffective in creating value for either consumers or producers, argues Nevil Speer. Worse yet it comes at a cost – government programs are never free.
Market-ready cattle saw a light trade into a softer market. Packer margins are in the red, but feedlots are firm sellers with showlist numbers declining.
Prospects for new entrants in a business are generally low if profitability requires economies of scale, large capital investment, and/or high levels of government regulation. The packing business checks all the boxes.
After realizing historic profits the past couple of years, beef packers now find themselves in a similar position as their cattle feeding suppliers experienced - shrinking margins and reduced leverage.
Cash cattle trades a week following the Thanksgiving rally saw steady prices, but the steadily declining supply of harvest-ready cattle will continue to shift bargaining leverage to producers.
The pendulum continues swinging toward cattle feeders as cash prices jumped $3 last week and left packers with their largest negative margins in nearly six years.
How do cattle producers get better? That happens with less social media and more spreadsheets; less pandering and more professionalism; less Matrix and more Moneyball.
The combination of effects from the pandemic in 2020 and drought since 2020 has pushed the peak in feedlot numbers and cattle slaughter into 2022, well past the cyclical peak in the calf crop in 2018.
Bullish trends in CME futures last week gave cattle feeders leverage to seek higher bids as last week progressed. Packers continue to lose leverage as the fall rally progresses.
November's USDA Cattle on Feed report estimated placements at 20-year lows and well below pre-report estimates, confirming this fall's bullish market has settled in for an extended stay.
Today’s weekly slaughter is much more robust than in 2015 and cattle supplies are at least adequate for the short term. Yet fed cattle numbers will certainly tighten as we move into 2023 due to the shrinking cow herd.
Packers were successful in filling their needs at steady money this week as wholesale beef prices moved lower. Feedyards were content to reduce showlists but remaining cattle are priced higher.
Autumn’s fed cattle price rally has pushed average cattle feeding margins through the $200 per head barrier for the first time since well before the pandemic.
Want to make producers better off? Squishy facts, alarmist narratives and politicians won’t get it done. Instead, the path to prosperity follows real data, critical thinking, and free enterprise.
Robust beef demand continues with retailers expecting the strongest sales this holiday season since before the pandemic. Strength on the demand side continues to pull cash cattle prices higher.
What happens when we assign the "Monty Hall Problem" to our decision-making process for the beef industry? The difference being we know what's behind each door, but will we choose correctly?
Cattle feeders refused some early bids last week and were rewarded with higher prices in all areas, resulting in another opportunity to clean up show lists.
