Cattle call by Scott Varilek: Daily Slaughter Increase
The cash cattle market and harvest pace picked up stride last week as we increased daily slaughter numbers. We were still short of desired daily kills but the upward trend was welcomed. Cash cattle traded firmer from 180-182 dressed in the north and 115-120 live in the south. A large increase in negotiated grid trade in Kansas was noted on Thursday. With all the news regarding negotiation, we may have caught someone’s attention.
Choice boxed beef price topped out near the record $475. The straight up trend has maybe come to an end. Packers were said to be offering discounts to retailers as the meat price more than doubled. In my opinion, we will see a sizeable correction in boxed beef soon. As the packing plant in Schulyer, NE is close to opening and Tyson sliding back into the cash market, we have optimism for more available beef.
A “set aside” proposal is making its way through debates as a possible solution to the backlog of cattle. I hear mixed emotions regarding such a program. The proposal will pay a feedlot producer to continue feeding market ready cattle a holding ration for an extended period before being marketed. It could take quite a few cattle off the showlist temporarily while chain speed is slow. I am not sure if this is just kicking the can down the road for problems later. It will likely decrease feeder calf demand with cattle staying on feed so the cow calf producer might want to be involved as these ideas form.
Thanks to all the individuals putting in timeless hours working on solutions to a struggling cattle industry. We may not all agree on topics as an industry, but I think we are a rare breed that love what we do. Have a great week, and I hope we can try pull together in these difficult times.
Scott Varilek, Kooima Kooima Varilek Trading
The risk of loss when trading futures and options is substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
Dad used to tell of his first job when they moved from Marion to Harrold in 1928. He was ten years old, big for his age, and needed to help the family earn some money.…