Demand strong, high heifers on feed numbers
The cash market has finally had some signs of life. Some northern prices reached the $130 live price last week with the south still at a disappointing $126 live. The $130 price was rumored early in the week from an unexpected packer and finished off with a major joining that bid. Not all producers received that $130 live price, but it was spotted. Nebraska had some significant trade at $208 dressed. The supply imbalance is the reason for difference from north to south. It is not unusual for the this to happen in the spring when our numbers are tighter.
Aberdeen showed up to the plate early in the week at $130 just 2 weeks after being approved to process Certified Angus Beef. The claim is that they have a goal of slaughtering higher quality cattle. With packer margins far in to the green, it would be a great opportunity for Aberdeen to capitalize on a shift to higher quality cattle. This was particularly interesting to me because more competition in the north would benefit the producer.
The cattle on feed report Thursday is slightly negative. Larger placements are the biggest hurdle so far from the reports. A large increase in heifers on feed along with weather problems earlier in the year are two reasons for this. Supply for the summer projects to be more than ample comparative to last year causing us to seek protection as needed.
The demand has stayed optimal through this peak of the cattle cycle. We can be thankful for that boost when we needed it the most. Happy Easter to everyone. I hope you enjoyed a juicy steak.
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