Call the Market

I'd be blatantly lying to you if I told you that 2020 hasn't challenged me. Like the rest of you, I've personally seen and felt the constraints of COVID-19's burdensome presence on our operation and obviously throughout the markets. Getting the phone call that packing plants were shutting down because of the spread of COVID-19 was a call that, a year ago, I would have never imagined hearing. Praying that fat cattle wouldn't dip down into the $0.80 range was a prayer that I never thought I'd mutter. Although none of my close relatives had to spend isolated time in a hospital, I cannot image the stark, helpless pain of visiting your sick grandparents at the hospital with glass keeping you separated for weeks on end.

Given the year's occurrences, preparing for Thanksgiving is difficult this year. As always, we come ready to gorge ourselves with food and to scoop up two helpings of peach pie, but are you mentally prepared to break bread with one another and give thanks? I know that may seem like a trivial question and some may argue that we can forgo reflecting upon our thankfulness since this year has been brutally painful, but I challenge you to rise to the occasion -- because that's what we do, time and time again.

The next time you go feed, I ask you to look out over your cattle, leaving the blinding bitterness behind you, and to truly absorb how blessed you are. Yes, I understand that this year's market yielded far from profitable prices for many of you, and that hardship is difficult. But when you see your cows scattered out, working the hills at the morning's dawn, you can't tell me you are not blessed.

Heading into this holiday weekend, I wanted to leave you with some positive realizations that have been developing in the beef market.

First, it's a blessing that we've seen carcass weights scale lower in recent weeks. For the week ending Oct. 24, steer carcass weights hit an all-time high of 931 pounds. That surpassed the industry's previous high set in 2015 and created a lot of pressure for feedlots and packers. Extra pounds contribute to extra tonnage that must be moved either domestically or internationally -- but either way, trying to achieve a current marketplace while carcass weights scale to all-time highs is no easy task.

Secondly, following the ruthless catastrophe that happened early this spring when packing plants were shutdown, the industry has since kicked slaughter speeds into high gear and worked vigorously to get caught back up. Year-to-date data shows that, currently, 2020 has slaughtered roughly 3.6% fewer head than what was processed in 2019. Considering the heavier weights that had to be managed and the difficulties of processing given the new COVID precautions, it's incredible that our levels are where they are compared to a year ago.

Lastly, the USDA Cattle on Feed (COF) placements finally dropped. After what felt like years of reporting higher placement figures, last Friday's COF report shared that, for the month of October, placements were down 11% compared to a year ago and totaled 2.19 million head. I understand that there is an exuberant number of cattle on feed, but thankfully the trend of higher percentages compared to a year ago has broken. And better yet, December's COF report is expected to share the same bullish news, which could fuel even more long-term bullishness heading into 2021.

I know that you've worked hard this year and I know that you've been challenged, but you have also prevailed! Yes, there are things that we can focus on that aren't bullish, but there is also some positive news festering in the cattle market that we can appreciate. I pray that everyone is showered in blessings in the days, weeks and years to come, as times have most certainly been challenging mentally, emotionally and financially. But this Thanksgiving, don't let the bitterness blind us, because we still live in the greatest country in the world and get to produce the world's finest red meat! And that, in and of itself, is a blessing.

Happy Thanksgiving!

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

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