Feeder cattle prices illinois12/29/2023 ![]() ![]() February and early March are usually when beef demand is at its weakest during the year, which leaves us with a continued bearish short-run cash market.įigure 1. as a strong supply of choice beef is getting ahead of demand. The choice-select spread has narrowed up to less than $10/cwt. Packers have been losing $35-45/head, on an operating basis, and they still have plenty of beef yet to sell. For packers and feeders, the profitability situation is rather grey to start out the year, as neither sector is in a position to turn a profit at recent prices. At current prices, profit margins on retail beef sales are narrow at best, leaving incentive to increase sale volumes. Rather than continued strengthening of demand for beef in the coming year, a stable status quo is becoming more likely. As a result the demand for beef has started out the year more like a lamb and less like the lion that many had anticipated a few months ago. This strong upsurge in beef prices made it difficult for retailers to feature beef cuts and still turn a profit. ![]() The choice-select price spread widened to more than $18/cwt. Profitability returned for a fleeting moment in November when high quality beef cuts surged in value. Profitability hit a low point of a $180/head loss on cattle sold in September. This short period of profitability was cut short by a combination of increasing feeder cattle and feed costs coupled with mundane fed cattle prices. The brightest point of the year was during the spring when returns edged past $120/head profit for cattle sold in April. Based on the Iowa Estimated Returns, a barometer of economic profitability, finishing yearling cattle last year netted an average loss of $40/head.
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