Price gains were sparse across the cattle and beef markets this week, but little ground was relinquished.
“Trade was active in most major market areas as the demand to own cattle is still quite good, just at lower price levels,” explain analysts with the Agricultural Marketing Service (AMS). “Heavy yearling cattle were somewhat immune to outside market factors this week as most of those weights were quoted steady to firm.”
Steer and heifer calves traded mostly steady to $5 lower, according to AMS. Regionally, calf and feeder prices held the most ground in the North Central states.
“Premiums and discounts get more pronounced this time of year with buyers looking for hard-weaned cattle that can thrive in a summer grazing program but are hesitant to take ownership of soft bawlers right off of mama,” AMS analysts say. “Any short-weaned or fleshy new-croppers were targets of steeper discounts and certainly widened the price spread for light and middle-weight calves.”
The folks at AMS also pointed out that deteriorating wheat pasture conditions due to dry and windy weather are prompting earlier movement of cattle from those pastures—about three weeks to a month early. Without significant rain in the next week or so, analysts says most of those cattle will likely have wheels under them by early May.
Buyer optimism crumpled early in the week with a plunge in cattle futures. A late-week rally helped Feeder Cattle futures pare losses and make week-to-week gains at the back of the board. Other than $1.40 higher in spot April, Live Cattle futures ended the week mostly narrowly mixed week to week.
Optimism for herd expansion seems intact, though, judging by auction receipts.
“Many markets noted exceptional demand for high-quality replacement females, in many cases driving the market for heavy yearling heifers and forcing order buyers to dig a little deeper if they wanted to own any,” AMS analysts say.
“In light of current market volatility, producers need to be watching cattle prices extremely closely. The gains today and tomorrow could disappear by the next morning,” says Andrew P. Griffith, agricultural economist at the University of Tennessee. “Similarly, the market could provide a favorable but short marketing window at any point and producers should be ready to seize the moment. Producers should be running the numbers.”
Through early Friday afternoon, cash fed cattle was steady to $1 on either side of even: $133-$134 per cwt in the Southern Plains. Live sales in Nebraska and Iowa-Minnesota were at $134-$136 with dressed trade at $214-$215. Rumors continued to circulate that short-bought buyers were still on the prowl.
“While it may not be a true indicator of long-term support, active mid-week trade with good packer demand (this week) is certainly a positive take-away after the volatile ride of the past few weeks, AMS analysts say.
Although wholesale beef values continued to trend lower, there were some glimmers of an upside.
Choice boxed cutout value was $4.31 lower week to week at $214.80 per cwt. Select was $1.68 lower at $205.25.
“Retailers are definitely working to secure inventory for late April and May features as the grilling season will begin to rev up,” Griffith explains. “History would indicate that consumers will turn to beef products as the unofficial beginning of summer approaches. Another contributor to support prices is the beginning of baseball season; nothing goes better with a baseball game than a hamburger, peanuts and a cold beverage.”
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