In a recent cattle market update, Katelyn McCullock, director and senior agricultural economist for the Livestock Marketing Information Center, says wholesale boxed beef is the current hot trade.
“The cash side of things closed Friday, really strongly at $3.43 for Choice and $3.10 for Select,” McCullock said. “This has been an incredible market to watch as well. Just a week ago, we were closer to $3.32 on the Choice side.”
The underlying fundamentals of these prices are largely supply driven.
“We have had this note of strong demand that has also pulled those cattle prices through and so we have got both sides of supply and demand getting cattle prices in the same direction right now,” McCullock said.
Post Fourth of July sales will be watched closely.
“I don’t expect it to be a large reset, but it wouldn’t be out of the question to see that price come down some,” she said.
Feed cattle prices and feeder cattle prices have lowered going into the summer.
“I think your feeder prices are going to be pretty sticky as long as it continues to rain,” McCullock said.
The dryness of the corn belt has led to some worry, McCullock said, “but absent of that, feed cost outlook looks good.
“The margins are there to continue to pay for feeder cattle. The worry would be, I guess, how much does the feed cattle market reset here.”
As for the feed cattle future market, it has been below the cash cattle market.
“They are anticipating a little lull in the market as well,” she said.
McCullock urges cattle producers to prioritize grass levels and forage capabilities this summer.
“That is going to be what enables people to, if they are interested in expanding, move quickly and kind of get ahead of that huge rush on what bred animals are probably going to do in the next couple of years,” she said.