Another week and another dollar or two have slipped through the cracks of the cash cattle market. Last week's cash cattle trade was an utter disappointment as live cattle traded for $113 to $114, which is $1 weaker than the week before; also, dressed cattle sold for mostly $180, which is $2 lower than the previous week. Looking ahead to this week's market, the same question lingers: "Does this week's cash cattle market stand a chance?"
Should the cash cattle market trade higher -- YES! But will the cash cattle market trade higher? That's the tough question. There are two things that will weigh heavily against feedlots' ability to move the cash cattle market higher this week. One is the fact that packers have lofty supplies of committed cattle already procured for this time. And, two, the seasonal correction in boxed beef prices could entice packers to slow their processing speeds.
Last week's cash cattle trade developed on Wednesday, and a little cleanup trade was noted through both Thursday and Friday. One of the talking points packers used to entice feedlots into selling cattle early in the week was they said they didn't need any cattle, which sends feedlots into immediate panic mode.
But let's step back for a minute -- if packers didn't need cattle, why did they offer bids as early as Wednesday? The truth is that, yes, packers have ample supplies of committed cattle already procured, but they still need cash cattle. Last week's negotiated cash cattle trade totaled 79,593 head, of which 69% (54,894 head) are committed for delivery in the next two weeks, while the remaining 31% (24,699 head) are committed for the following 15 to 30 days.
We can't be upset about the rhetoric packers use to make deals; however, we, as cattlemen, need to learn from their savviness.
This week's cash cattle market is going to be up against strong pushback again, but if feedlots can unite and market their showlists as one voice, steady to potentially higher prices could be achieved.
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ShayLe Stewart can be reached at firstname.lastname@example.org
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