Sort & Cull

The cash cattle market has powered relentlessly through 2023, making new all-time highs for the market as packers are pressured to buy cattle amid short market-ready supplies and strong beef demand. However, as a measure to keep a lid on cash cattle prices ahead of the expected fourth-quarter rally, packers have been scaling back processing speeds. Last week's total slaughter was estimated at 612,000 head, 13,000 head less than the previous week and 55,000 head less than a year ago.

This is a normal ploy that packers use as their business obviously does better when fat cattle prices are cheaper. But what may grow to be problematic for the market, especially feedlot managers, is the combination of not only smaller processing speeds but also near historically high carcass weights.

Last Thursday's actual slaughter data showed that for the week ending Sept. 16, steers averaged 919 pounds, 2 pounds heavier than the previous week and 1 pound more than a year ago. For the last two weeks in a row, steer carcass weights compared to those in 2020 have only been 1 pound shy of the 2020 all-time high carcass weights when cattle were backed up and carcass weights soared.

Supplies of market-ready cattle are supposed to grow increasingly thin in the fourth quarter of 2023, which could ignite another rally in the cash cattle market, but managing supplies isn't only done from a headcount perspective. One must consider what these cattle are weighing and what demand and packer profitability are deemed necessary for throughput speeds.

Analyzing the markets is a constant juggling act. You just never know what balls are going to be up in the air and when more are going to be added to the mix!

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

(c) Copyright 2023 DTN, LLC. All rights reserved.