This week’s Beef Market Update starts with one central question: What is going on with this cash market?
Anne Wasko, of the Gateway Livestock Exchange, joins RealAg Radio host Shaun Haney to help answer this question, because, as Haney notes, many are disappointed with where the market is currently sitting.
Wasko says that the impact of an August 9th fire at the Tyson Beef Plant in Kansas is still playing a significant role in where the cash markets are at.
“The markets have been trying to figure out things ever since. It was a big shock the initial week, a little bit of recovery the following week — which was last week — and then this week, of course, it looks like the southern U.S. Kansas cattle trading is trading $2 to $3 lower than last week,” she explains. “Nebraska dressed cattle are looking about a nickel lower.”
Boxed beef prices that shot up the first week after the fire have settled back — down almost as much as gained that first week.
“I think the big thing from the whole loss of that capacity at that Kansas plant is just the uncertainty about when to rebuild, when to re-open, when do we kind of get back to some normalcy,” Wasko says. “Because as we’ve talked about before, whether we are talking about trade or packing plant capacity uncertainties, all of these things just kind of create havoc for the market. And that’s exactly what we’ve been dealing with.
“Given time, markets are going to respond and react accordingly. It’s very frustrating for all involved.” (Story continues below)
Alongside waiting for the market to respond, cattle producers are approaching the feeder fall-run. Wasko notes that Western Canada especially has seen a slow summer, which in part is due to the fed market trading a nickel lower than it was earlier this month, due to the devastating fire.
“Losses are starting to stack up at the cattle feeding level, but haven’t really seeing that transition into significantly lower feeder prices,” says Wasko. “I think the market kind of recovered, feeder cattle prices recovered these past couple of weeks, back up to the low 90s, so those levels maybe still aren’t where they were at say a year ago, but awful close or maybe closer than some of us thought.
“I think grass conditions in many parts improved, so we’ve seen the run kind of slow up in those areas, as producers are going to try to put on the pounds that they are certainly going to need to move forward. So we have seen some tests of some forward price calves, but again, a very very quiet test,” she says.