Varilek’s Cattle Call
March 18, 2021
The seven weeks of sideways cash in live cattle has hopes of gaining ground in the coming days or weeks. Producers are feeling caught up enough to band together and ask for higher prices. With demand remaining outstanding, it should not be too much to ask for a couple more dollars. The madness of March is a strong feeling for future cattle profits with little to show yet.
The deferred futures contracts remain hot climbing into contract highs again. The funds are remaining optimistic that cattle can turn the corner and find higher levels. Grains and hogs have already made their move, so some are led to believe cattle have opportunity. Open interest is growing in cattle futures which is a good sign when it coincides with a rally.
News is forming of increased packing capabilities for live cattle in the future. National Beef Packing Company, LLC announced plans to increase slaughter capacity to the Iowa Premium beef facility in Tama, IA. That is great news to an industry that is in need more space to harvest animals. Another group is also talking to start a new plant in Nebraska. The profits are evident in the packing industry and capitalism might be kicking in which will help the producer immensely with more options to bring fed cattle. Leverage is the main issue for the producer currently, so this is great to hear of increase slaughter capacity plans.
Good luck with your brackets. I am no help for you when it comes to March Madness, but we do finally have market opportunities presenting themselves with higher futures prices. Optimism remains, but that does not mean with are all clear skies when it comes to raising livestock. Have a good week.
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Drought stressed forages can be high in nitrates and may be potentially toxic to cattle. Photo credit Troy Walz.