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Current Cash Cattle Prices Are an Insult to Feedlots


Back in 2011, choice cuts made a record-high price for the fourth week of February time frame, when they sold for $241.08 to $247.58. Looking back during the last 10 years, live cattle prices have ranged anywhere from $124 to $158 for the end of February. And last week’s cash cattle market averaged only $114 — which is $10 to $44 weaker than years past.

Packers are some of the smartest and most intuitive when it comes to understanding the cattle market. Toward the latter part of last year — when we understood that cattle prices were going to scale higher once the market broke into the second quarter — packers began to plan. Part of the reason why packers are able to pressure the cash cattle market and keep it from trading in the 10-year threshold of $124 to $158 is because they’ve worked diligently to build their captive supply for this timeframe. If they have cattle already committed for this time frame, their need to dive wildly into the cash cattle market becomes far less than what it could have been.

Looking at Monday’s official reports, last week’s cash cattle trade totaled 84,242 head. Of that, 91% (77,087 head) are committed for delivery in the next two weeks, while the remaining 9% (7,155 head) are scheduled for delivery in the following 15 to 30 days.

The good news is that there were very few cattle procured last week that fall in the later delivery; the bad news is that, in the upcoming weeks, packers will still be able to skate by without having to generously support the cash cattle market, once again.

In the weeks and months to come, it’s vital that cattlemen keep tabs on kill schedules and monitor how many cattle are bought each and every week. Keeping up with this data will help producers better understand how feedlots sit with their showlists and how aggressive packers will need to be in the weeks to come.

ShayLe Stewart can be reached at shayle.stewart@dtn.com



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