Sort & Cull

Cattlemen and the Cattle Market React to Winter Conditions

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
Cattle can handle winter conditions, but it takes proper nutrition, shelter and plenty of water. (DTN file photo)

Last week felt like an entire year in and of itself. With the back-and-forth jitters the cash cattle market endured from early deliveries to the continued weather pressure that affected nearly the whole country, last week, cattlemen had their hands full.

The cash cattle market has been desperate to rally higher for the last couple of weeks. With exceptional beef demand both domestically and internationally, packers have been quick to process cattle and are even more antsy to turn profits with boxed beef prices as strong as they are. Thankfully, this eagerness has helped the cash cattle market gain at least $1 or $2 over the last three weeks, and even though last week's cash cattle trade was able to secure a stronger market, the feat wasn't easy.

Early in the week, the nearby February live cattle contract was pressured from deliveries that were made as individuals with short positions looked at the market's basis and saw opportunity. When the market received these deliveries on Wednesday and Thursday, feedlots grew worried the cash cattle market wasn't going to be able to demand $1 or $2 more with the February contract now trading lower. But remembering that the cattle market loves a storm and seeing that another blanket of white powder was scheduled to hit the countryside by Friday and trickle through the weekend into this week, feedlots held out until Thursday and Friday to trade their cattle. Low and behold, their patience paid off again, as the cash cattle market secured $1 higher for live purchases and $2 higher for dressed cattle, and the nearby live cattle contracts closed sharply higher by Friday's end! Halleluiah!

In the weeks ahead, feedlots will experience challenges in the cash market, as packers have a plethora of committed cattle already secured for this time. Last week's cash cattle trade totaled 74,422 head, and of that, 70% are committed for delivery in the next two weeks, while the remaining 30% are committed for delivery in the following 15 to 30 days. Last week's cash cattle trade was an achievement in the sense that higher prices were secured, but only trading 74,422 head is somewhat disappointing. The closer to 100,000 head or more the cash cattle market can move, the better!

While the cash cattle trade was on the forefront of feedlot managers' minds, cattlemen on all sides of the industry were bearing down, taking on the storm minute by minute, hour by hour, day by day. The one beautiful thing about these frigid temperatures is that it has helped keep dry conditions. Dealing with cold and wet conditions can be some of the biggest challenges newborn calves all the way to finished steers in feedlot pens struggle with, as finding any warmth seems nearly impossible. Little tasks like starting tractors or firing up bale-beds can quickly turn into a full-day project if tractors gel up or the equipment simply won't start. So, cattlemen, please know that you are in our thoughts and prayers and that we thank you for your dedication and stewardship through these challenging seasons.

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

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