Varilek’s Cattle Call: JBS closes PA plant
Just when you thought big headlines could slow down the volatility, another story finds its way in. Screwworm dominated the headlines all week whether it deserved that much attention or not. The consumer did not scare away from beef which was one of the biggest fears. Vaccinations, pour-ons, and sterile flies were set into motion last week. It doesn’t have the catastrophic feel that it had as we led up to the screwworm being in the United States in my opinion.
Once traders became sick about hearing the worm news, futures were able to look at fundamental. Slaughter numbers still look tight and feeder calf prices are strong. The United States cattle herd is still tight and has years before sizeable regrowth is noted.
The big news Friday was a JBS announcement of closing a packing plant in Souderton, PA. It looks to be a plant killing about 2,000 head per day of several Canadian cattle. Futures traded lower, but it was not a catastrophe. The infrastructure is changing in the beef industry. The United States is the number one importer of beef. Now Mexico is slaughtering their own cattle and shipping us beef. Will they even want the border open? The unintended consequences of the closed Mexican border could be noticed. Pennsylvania is not in the heart of cattle country, but it can be another burden none the less.
Cash prices were expected higher with asking prices of $258-260, but some $255 traded Friday on light volume. It was a disappointment with most electing to pass. Remember markets are closed Friday for Juneteenth. Grill some extra steak, so we can make it a celebration with beef. Have a good week.
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