A harsh winter storm swept across much of the Plains, leaving a path of destruction and unsafe conditions in its wake. The storm caused transportation and logistic issues, which slowed down cattle volumes and lowered market prices.
“It’s a peculiar week for the livestock market as the countryside sits idly trying to assess the damage done by the recent storm in the form of lighter carcass weights, calves lost, the total amount of lost tonnage due to slower processing speeds, and the list goes on,” ShayLe Stewart, DTN livestock analyst, commented Wednesday afternoon.
Slaughter processing volume is the big question in everyone’s mind. Thursday boasted the highest daily slaughter for the week, at 111,000 head. This was a step up from the earlier days in the week, which ranged from 75,000-90,000 head. As of Thursday afternoon, total slaughter was at 380,000 head—about 90,000 head below usual levels and almost a full day behind. USDA released actual slaughter numbers for the week earlier, which was 611,000 head—also below normal levels.
“This week’s slaughter number helps explain why packers didn’t push the market higher,” the Cattle Report said early last week. “The decline was not designed to back cattle up, and was not because of poor margins. It was simply the combination of pressure to push large volumes of cattle, day after day, through beef plants built 50 years ago, and the required continual maintenance joined with slaughter reductions because of the weather-related problems.”
Cash trade was virtually nonexistent, with Thursday selling the brunt of the volume at 17,235 head. Live steers ranged from $113-115 and dressed steers sold for $181. Formula cattle sold at the mid-$180s mark, but on lighter volume. The week prior’s cash trade was disappointing, with only 74,422 head traded. Live steers averaged $113.81 and dressed steers averaged $180.05.
The Fed Cattle Exchange listed 1,444 head for its weekly online sale, but didn’t sell any cattle. High bids ranged from $110-113.
Live cattle contracts traded lower throughout the week. Trade opened Tuesday morning, after a day off from the federal holiday. Thursday closed with the February contract at $115.12 and the April contract at $122.92, several dollars lower than the week before. The February contract has been trading at a record $8-9 lower than the April contract.
Boxed beef prices have climbed higher, with the Choice cutout at $238.85 as of Thursday afternoon and the Select cutout at $227.47.
Most sale barns across the Plains cancelled their sales for the week, hoping to pick up again the following week once conditions were safer to travel in.
“It is a brutal time to be a cattle feeder as keeping cattle alive and healthy through these storms is no easy feat and isn’t for the weakhearted,” Stewart commented.
The March feeder cattle contract closed Thursday at $138.20 and the April contract at $141.75—several dollars short of the week prior. The March corn contract has held steady and settled higher Thursday at $5.50. The CME Feeder Cattle Index found some slight gains to $136.29, although it has had limited sales to pull data from.
“With uncertainty in the live cattle market given the quiet cash cattle trade this week and packing plants being shut down, it’s hard for the feeder cattle market to get overly excited when corn prices are as strong as they are and their exiting outlet (the packing industry) has been thrown another wild card this week,” Stewart remarked.
Montana: Miles City Livestock Commission was one of the few barns to host a sale. A total of 1,100 head sold, with the best test on steers 650-699 lbs., which sold steady. All other steer weights were too lightly tested to develop an accurate market trend, however higher undertones were noticed. Heifers were too lightly tested this sale and last to develop a full market trend, but steady to higher undertones were noticed. Benchmark steers averaging 679 lbs. sold between $149-151.
Nebraska: Bassett Livestock Auction in Bassett sold 2,200 head Wednesday and compared to two weeks prior: 500-700-lb. steers traded unevenly steady; 550-lb. heifers traded $2 lower; and 600-650-lb. heifers traded $3-4 higher. Benchmark steers averaging 725 lbs. sold between $135.50-147.
South Dakota: Sioux Falls Regional Cattle Auction in Sioux Falls was one of the few markets to host a sale Monday. A total of 890 head sold. Feeder steers and heifers sold unevenly steady, except feeder heifers 450-500 lbs. sold $10 higher. Benchmark steers averaging 743 lbs. sold between $143.50-152.25. — Anna Miller, WLJ editor