Varilek’s Cattle Call: Slaughter Growth | TSLN.com
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Varilek’s Cattle Call: Slaughter Growth

Varilek’s Cattle Call: Slaughter Growth 6-19-20

The monthly cattle on feed report added to the misery that is the cattle market. The numbers proved bearish over pre-report estimates. Placements were 99 percent versus the 96 percent estimate, and the on feed number was 100 percent versus the 99 percent estimate. Marketings were scary as expected coming in at 72 percent versus the 74 percent estimate.

The 50/14 negotiated cash bill continues to pick up steam. More organizations including some southern groups are backing the initiative. Weekly direct slaughter prices are still showing the unfair imbalance that northern family operations and small feedyards face feeding cattle. Formulas for the week ending June 15 printed a steer/heifer average price of $185.99 while the negotiated dressed steer and heifer prices were $166.49 and $166.46. Quantity wins over quality with todays setup. The best cattle that walk on this Earth are right here in the north. With a $180/head disadvantage on quality cattle, it is driving many to fight for change. We are of course in unprecedented times, but it puts a highlight on what I believe needs to be addressed.

We remain in an uphill battle in the cattle industry with most of the summer ahead. The heat will be a struggle with the large number of fed cattle waiting to be harvested. Carcass weights continue to be near 50 pounds higher than year ago levels. Hopefully soon I can have some good news for you. Maybe we can remind everyone of the increased heifer slaughter and decreased cow herd for hope of future opportunity. Have a great week.

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.


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