Sort & Cull

The Beauty of Negotiating

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
Ranchers have been going through their busiest time of the season, shipping calves, as they prepare for the long, cold winter ahead. (DTN photo by ShayLe Stewart)

Last week's early cash cattle asking prices ranged anywhere from $122 in the South and $193 plus in the North. Cash cattle trade started early in the week at the Fed Cattle Exchange, then trickled into Thursday where the South got most of its business done at $119 to $119.50, and then lastly, cattle in the North waited until Friday to trade for $187 to $190, but mostly at $188. Both regions called cattle $1.00 higher than the last week's weighted average.

How do we know if that's good, bad or indifferent? After all, feeders didn't get their full asking prices, but didn't they still get higher money than the week before? Good questions! To answer that, I think it's most important to understand where the market is seasonally and know how it generally performs during this time.

Holidays are usually tough on markets. Cattlemen from both sides of the spectrum have just gone through one of their busiest seasons -- shipping calves in the fall -- and are gearing up for a long winter of cold days and feed wagons that won't start. This year continues, however, to keep up with its unusual behavior and has treated cattlemen and packers alike -- better than expected during the holiday season.

So, to answer whether last week was a success or not, you have to respect that given the market is trading in between two major holidays; that means the $1.00 higher cash cattle gains is a great success. Of course, packers would have liked to buy cattle for steady or lower prices to help secure profits while boxed beef prices are dwindling. And cattlemen always look to sell cattle for more. But, given that the two parties were able to meet in the middle last week, this marks success.

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

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