That old adage about dropping your shovel before your hole gets deeper applies only loosely to the current market conundrum.
There are too many heavy cattle yet to come to town—a bubble of excess tonnage forged by record-heavy carcass weights and decreasing currentness in marketing. No one can simply lay the shovel down, though.
“Packers are buying fed cattle, at heavily reduced prices compared to just a few weeks ago, but are also scheduling those cattle for delivery three to four weeks out (according to industry reports),” say analysts with the Livestock Marketing Information Center (LMIC), in this week’s Livestock Monitor. “It will take some time for the backlog of cattle that need to be marketed, and those that should have already been sold several weeks or more ago, to move through the system.”
For the week ending Sept. 12, Federally Inspected dressed carcass weights averaged 919 pounds for steers, according to LMIC. Average dressed heifers weights were 826 pounds.
Because weekly weight averages are preliminary, with a two-week lag and based on a rolling average, LMIC analysts say, “When weights are moving this high this fast, the two weeks of estimated weights will be revised higher. So, the weekly preliminary weights are currently not fully reflecting what is transpiring in the marketplace.”
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