Sort & Cull

It was just last week we chatted about how packers were cutting kills to back up cash cattle supplies and keep the cash market from advancing dramatically. While I wish I could come to you early this week and share that packers are going to increase processing speeds to keep up with increasing consumer demand, that simply isn't the case. If anything, packers plan to do the exact opposite and cattlemen need to be aware.

In fact, if we look at the data the market is sharing, packers have positioned themselves to need the cash market even less in the weeks ahead. First, beef imports are on the rise. Based on the Imported Meat Passed for Entry in the U.S. by Country report, thus far in 2024 fresh beef imports have totaled 279,253 metric tons (mt), which is 34% more than a year ago. Secondly, last week's kill only totaled a mere 583,000 head -- which is 16,000 head less than the previous week and 48,000 head less than the same week a year ago. And it's been rumored packers are intending to cut kills even more this week -- which seems likely given that Monday's kill is only expected to total 114,000 head.

If packers weren't worried about there being enough cattle in the market to go around, they'd likely be taking a much different approach to the marketplace given how strong current boxed beef prices are. Throughout last week's market, choice cuts averaged $305.93 (which was $2.72 higher than the previous week) and select cuts averaged $295.77 (which was $3.52 higher than the previous week). But packers are well-seasoned veterans when it comes to managing supplies and they're too keenly aware of the market's current supply outlook to back themselves into a corner where they're forced to pay whatever the cash cattle market yearns for. It's likely that this upcoming week's cash cattle market trades steady at best given that cash cattle traded higher last week and given that processing speeds are expected to be cut even more in the weeks ahead. Feedlots are going to be hard-pressed to keep their showlists current in the months ahead, but thankfully these high cash cattle prices are making the extra marketing efforts worth their time and energy!

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

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