Fed cattle prices have started the week on a firm footing, with USDA quoting cash sales as much as $6/cwt higher than a year ago in the North. Packers ran a full schedule last week at 528k head, the second largest fed slaughter week so far this year. With Father’s Day and 4th of July business ahead, packers will likely need to fill orders, especially as forward sales have been robust. Getting cattle bought appears to be a bit more difficult this week even as on feed supplies are above year ago levels. As a result Monday slaughter at 93k head was about 5k head lower than the week before and Tuesday slaughter was lower as well. The chart in the full report shows that packers have fewer cattle booked on a forward basis for delivery in June and July and August supply of contracted cattle is not much better. For the week ending June 13, the supply of contracted cattle for June delivery was 161,908 head, down 32,467 head or 16.7%. The supply of forward booked cattle for June is even smaller than pre-COVID levels, with near 254k head of cattle contracted for delivery in June 2019.
What’s quite impressive in the latest cattle trades is the wide regional spreads, likely a reflection of what it takes these days to move cattle around and lack of processing capacity in parts of the country. The cash price spread in yesterday’s report was 136-149, with an average price of $144. Clearly packers are willing to pay a premium for cattle located near major processing plants. The average price quoted for live steers in Nebraska was $146/cwt while the afternoon report for TX/OK/NM cattle pegged the average price at $136/cwt. Kansas live cattle were $139/cwt while the average price in IA/MN was $144/cwt.
