Early-week strength in the cattle market faded Thursday as headlines swirled surrounding an impending labor strike at a Colorado beef plant.
“The UFCW Local 7 in Greeley, CO, voted to authorize an unfair labor practice strike against JBS yesterday,” Cassie Fish, market analyst, wrote in The Beef on Thursday. “JBS operates a fed cattle processing plant in Greeley with sizable daily capacity. There is no date set for a strike and most likely this is part of an ongoing negotiation between the workers and management.”
The strike would affect about 5,000 head of cattle processed daily at the plant.
Live cattle futures closed sideways after opening higher at the beginning of the week. The February contract lost 25 cents to $235.25, and the April contract lost $1.67 to close at $235.60.
“Firm pressure in outside markets and weaker beef values cannot be downplayed in the hesitancy for futures buyers to step into a market which very well could have run out of oxygen at current price levels,” ShayLe Stewart, DTN livestock analyst, wrote in her Thursday comments.
Cash trade through Thursday totaled about 4,000 head. Live steers sold from $237-238, and dressed steers sold for $378.
“If there is an actual work stoppage in Greeley, the pertinent question is how long?” Fish noted. “Losing the fed cattle capacity of Greeley for a week or two or longer would negatively impact the northeastern Colorado, western Kansas and western Nebraska region.”
Cash trade for the week ending Feb. 1 totaled 83,034 head. Live steers averaged $239.35, and dressed steers averaged $376.18.
Slaughter through Thursday totaled about 450,000 head, compared to 436,000 head a week earlier. Total slaughter for a week earlier is projected at 531,000 head. Actual slaughter for the week ending Jan. 24 was 540,305 head. The average steers dressed weight was 987 lbs., up 3 lbs. from the prior week.
Boxed beef traded sideways over the week. The Choice cutout lost about 40 cents to close at $367.25, and the Select cutout lost 35 cents to close at $360.37.
USDA’s long-anticipated biannual Cattle inventory report was released on Jan. 30. The report noted that all cattle and calves in the U.S. as of Jan. 1 totaled 86.2 million head, slightly below the 86.5 million head reported last year.
Feeder cattle
Feeder cattle futures closed lower after trading higher all week. The March contract lost about a dollar to close at $364.07, and the April contract lost $2.72 to close at $360.50.
“This market move seems like a general reversal to early week buyer support that flooded the market during trade Monday and Tuesday,” Stewart said. “In comparison to the wild shifts seen last fall, these $4 to $5 per cwt swings seem generally tame,” she said. “But it does create significant uncertainty given how lightly traded the feeder cattle market remains with generally light volume.”
The CME Feeder Cattle Index gained about $10 to close at $374.57.
Corn futures traded mostly sideways. The March contract gained 5 cents to close at $4.35, and the May contract gained 4 cents to close at $4.43.
Colorado: Winter Livestock in La Junta sold 3,246 head on Tuesday. Compared to the previous auction, feeder steers sold $4-5 higher, with instances of sharply higher across all weight classes. Feeder heifers sold mostly sharply higher across all weight classes. Benchmark steers averaging 732 lbs. sold between $382-395, averaging $390.07.
Iowa: Russell Livestock in Russel sold 4,048 head on Monday. Compared to the previous auction, steers sold mostly $8-18 higher. Heifers sold $7-17 higher. Benchmark steers averaging 717 lbs. sold between $385-423, averaging $404.38.
Missouri: Joplin Regional Stockyards in Carthage sold 5,000 head on Monday. Compared to the previous sale held two weeks earlier, feeder steers sold steady to $20 higher at the mid-session. Feeder heifers sold from $5 lower to $10 higher. Benchmark steers averaging 789 lbs. sold from $358-369, averaging $365.85.
Oklahoma: Oklahoma National Stockyards in Oklahoma City sold 2,624 head on Monday. Compared to the sale last held two weeks earlier, all classes were lightly tested. Feeder steers sold $4-12 higher, and feeder heifers sold $3-8 higher. Steer and heifer calves sold mostly steady. Benchmark steers averaging 776 lbs. sold from $357-370, averaging $364.51.
Texas: Lonestar Stockyards in Wildorado sold 1,458 head on Tuesday. Compared to the previous auction, feeder steers and heifers traded mostly $6-10 higher, with instances of up to $20 higher on the nicer quality, reputation sets. There were not enough comparable sales on steer and heifer calves for a market trend. Benchmark steers averaging 734 lbs. sold between $374.50-397, averaging $392.95.
South Dakota: Sioux Falls Regional in Worthing sold 5,021 head on Monday. Compared to the previous auction, feeder steers sold steady to $5 higher, except 650-750 lbs. were $7-10 higher. Feeder heifers sold $10-20 higher, except 950-1,000 lbs. were $8-15 lower. Benchmark steers averaging 722 lbs. sold between $387.50-419, averaging $406.73. — Anna Miller Fortozo, WLJ managing editor
