Sort & Cull

Coming back from the Memorial Day weekend last Tuesday, a cyberattack on JBS plants led the cattle market to temporarily scramble as if attacked by vicious wolves. Looking at the situation now, we have a lot to be thankful for as the circumstances could have been much worse. However, there still are ramifications to this attack.

From a technical standpoint, the live cattle complex only suffered one day of substantially lower trade (on June 1) and cash cattle prices held steady for the sixth week in a row. But when we evaluate the cattle market, we can't just look at whether the day's prices are higher or lower and get a true image of how the market's conditions are faring -- we must dig much deeper.

We must challenge ourselves to ask questions that include: How will this affect the market immediately? How will this affect the market from a long-term standpoint? How does this positively/negatively affect the different beef sectors from the cow-calf producer, to backgrounders and feedlots? And what ramification does this have on the market's overall beef demand?

And while I'm thankful that last week's cyberattack was quickly dealt with, I'm also here to tell you that the cost of wasted time and missed opportunities is high. For example, look at last week's average boxed beef prices. Throughout the week choice cuts averaged $338.56 (up $8.92 from the previous week) and select cuts averaged $310.80 (up $7.46) and the week's total movement of cuts, grinds and trim only amounted to 512 loads.

While we can appreciate the immediate attention that JBS gave to the market crisis, we can't overlook greedy packers gouging beef consumers -- these elevated prices will negatively affect beef demand.

And while boxed beef prices continued to climb, the cash cattle market stomached another week of steady prices and deferred deliveries. Last week's cash cattle movement only amounted to 65,689 head. Of that, 75% (48,985) were bought for delivery in the two upcoming weeks, while the remaining 25% (16,704) were purchased for the following 15- to 30-day delivery. And a large percentage of the cattle that were sold in Nebraska were sold with deliveries for the week of June 14 and June 21.

So, while the rest of the world may think that because plants are running, therefore the problems associated with last week's shutdown must be resolved, that's far from the truth. When plants aren't running at the speed to meet demand, boxed beef prices escalate, cash cattle prices remain stagnant despite ample supplies of market-ready cattle. The market will undoubtedly have challenges to overcome in the weeks and months ahead because of this setback and its rippling affect.

Tune into the latest Cattle Market News update to hear more about last week's cattle market by clicking this link or by heading to the DTN/Progressive Farmer Facebook Page: https://fb.watch/…

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

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