Delayed Marketing Bolsters Cattle Feeders' Bargaining Position

herd of cattle feeding

Report Snapshot

Situation

Drought-reduced beef cow numbers and resulting tightening feeder cattle and calf supplies are expected to decrease slaughter totals and increase fed cattle and beef prices going into the spring grilling season. Winter snowstorms have led to poor feeding conditions and weight loss in northern feeding areas. In response, cattle feeders are delaying marketings to allow cattle time to recover. This has started the seasonal spring rally and added resolve to feeders asking higher prices.

A Harsh Winter but a Brighter Season Ahead

Cash fed cattle prices and boxed-beef cutout values found some footing by mid-December with better-than-expected holiday demand and began the new year in rally mode. In early January, the polar vortex created horrible pen conditions and poor cattle performance, dramatically reducing fed cattle carcass weights by more than 25 lbs./head. Cattle feeders, in turn, reduced offerings to packers as they tried to feed some of the lost weight back into the cattle. Average fed cattle carcass weights bottomed the first week of February before trending higher. 

A snowstorm in early March produced significant snowfall with depths of 12 inches or more covering much of northeastern Colorado and extending into western and central Nebraska and Kansas. I expect that this snow event will add to the seasonal decline in weights that normally lasts into June and delay fed cattle marketings through April.

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