Last week's fat cattle trade didn't storm to new highs, but we were reminded about the power feedlots hold when they work together and rally the market.
Feedlots dread the weeks leading up to the Christmas holiday and long for the first quarter of the new year when trade is back to a regular session, slaughter speeds are on a normal pace and traders are around to manage their business on the board. Some years the market jumps higher leading into the holiday, and other years it's like the market is a ghost town, which makes marketing cattle so challenging from Christmas until the New Year.
But last week's cash cattle trade wasn't a waste of time. Northern feedlots sold dressed cattle for mostly $165 to $168 (which was steady to $3.00 lower than the previous week) and live cattle for $105 to $108 (which was mostly $1.00 to $2.00 lower). There were a lot of Northern feedlots sitting on heavy cattle and they knew they had to get them moved before the week was over and before they were left carrying those cattle into Jan. 1, at which point the cattle would have been significantly heavier.
The Northern feedlots did what they had to do for the circumstances they were in, but the South had a different deck of cards to play.
The Southern feedlots are usually chomping at the bit to test the cash cattle market and to get cattle committed for the week as early as Tuesday. But last week, the Southern feedlots were determined to get $108 and didn't care if they had to carry their cattle over Jan. 1, they weren't letting one single pen leave for anything less than $108. The Southern feedlots waited and waited, and come Thursday, packers caved to paying their full asking price of $108, which is a couple cents stronger than last week's weighted average.
Heading into 2021, I pray that cattlemen don't overlook their importance and power and use the market to their advantage like the Southern feedlots did last week. Whether you're a cow-calf producer looking to market your steer calves or a feedlot looking to move a group of fat cattle, it's vital to remember you hold the cards; you decided when those cattle move and for what price. Yes, I understand there are circumstances when you don't feel like you have much control (maybe it's a banker breathing down your neck or the futures market cracked in two) but more times than not, if we gather ourselves and think logically we can find a path to success.
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ShayLe Stewart can be reached at firstname.lastname@example.org
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