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The Midwest Cattleman · August 24, 2023 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         Retail beef pricing is still holding firm at +5% over last year.     We’re still monitoring for the potential of a seasonal peak in
      The entire jump in pricing since 2019, on a retail basis, is up  feeder prices. Prices for 700 - 900# feeders in the sale barn typ-
      35%. The live animal side has seen higher pricing based on lower  ically peak in the first week of August and decline until lows in
      offered supplies. It has also regained ownership of the retail dol- Q1. Futures typically peak on August 1 and decline until at least
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been
                                                                               Feeder Cattle:  All you have to do is look at the corn market for a reason for the
      lar. Four years ago, fed cattle pricing accounted for 40% of retail.  December 9. Currently there is no confirmed peak in sale barn
                                                                            pull-back in feeders. If I owned a feedlot I’d be nervous to say the least.  I do feel
       placing a bullish tilt to this market for some time now.  I may need to temporarily
      Today it is 48%.                                                      the feeder market has overdone it to the downside and it will be tough to break it
       place this on “hold” for a while.  The higher placements the last three months will  prices. Futures “may” have posted a peak as they are lightly re-
       have a negative impact on prices yet, so like they say, “All good things come to those   further.  The early corn harvest has most feeder buyers in the field and I don’t think
         In the short term cash prices are in a lull. Peak live pricing in  treating from August 7 highs.
       who wait”.  I see production numbers staying over last years’ levels until at the
      June reached up to $185 for the South and $189 for the North.         they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
                                                                              The beef trade is preparing for the annual flush of offered
                                                                            little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
       least the end of the year.  Beef shipments have been lagging last years’ levels now
      Current pricing is rangebound, just off the recent low at $177/$178   This market will rally....wait and see.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks  weaned calves. We expect prices at the peak marketing in the
      for the South and $183 in the North. We agree with the market’s
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low  first week of October to run 35% over last year. Our $235 estimate
       imports and high exports have held this market up all summer.  We’re starting to
      current view of mixed trade until Q4 starts.                          for 525# calves out of Oklahoma City would be the second highest
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
                                                                            ever for that month, only second to $290 in 2014.
                                                                                                  Trading commodity futures involves substantial risk of loss
                                                                                                  and my not be suitable for all investors.  The recommendations
       Rich Nelson                                                                                express opinions of the author.  The information they contain is
       Allendale Inc.                             Allendale Inc.                                  obtained from sources believed reliable, but is in no way guaran-
       815-578-6161                                                                               teed.  The author may have positions in the markets mentioned
                                                                                                  including at times positions contrary to the advice quoted herein.                                                                  Opinions, market data, and
                                                                                                  recommendations are subject to change at any time.
       What Does this Report Mean to Me?
        Q #1
       Q: Who is losing out in the 2023 beef story?
       What do you think the price of fats will be in April 2011
       Answer: It’s hard to see the forest for the trees here, but peering through the foliage I see $105.00 fats on the horizon for April.  Demand is
       A: Fewer cattle offered tightens the processed beef to live animal price spread. It also lightly changes the fixed cost applied to each
       going to have to kick in though in order to get it.
       animal. Tyson’s beef processing margins were a strong 12.7% and 10.7% in the first two quarters of 2022. For 2023 those same periods
        Q #2
       dropped to 0% and 1.3%. Light losses will show occasionally in the coming months. More serious issues await in 2024 and 2025.
        Due to the recent break in feeders, would you be holding your fall-weaned
       Q: What should I do with my fall calves?
       calves for a while or letting them go?
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
       A: In these 2023 – 2026 years we have suggested feedlot buyers should follow the same plan they did for this year. Procurement
       ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
       for the full year’s needs ahead should be done in one lump on these seasonal breaks. Sellers have a good opportunity here.
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       Protection for your routine sales ahead in Q1 can be done with about $1 up front cost and a margin deposit. This would entail
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       buying a January $248 feeder put and selling a $256 call. This puts a floor in but also allows for the producer to benefit for up to $6
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       for “higher feeders” is “Hope”.
       of any further rally. A commodity risk professional can discuss this protection in more detail. I expect eventual downside of around
       $240.                                                                 November  6th

                                                                               Lunch at 11:00 a.m.
                                                                                   Sale at 12:30
                                                                                      Sale Offering
                                                                              16 - 2010 Heifer Calves Jan. - May
                                                                              16 - Breeding Bulls 7 to 18 months             RH Standard Lad 0313
                                                                              16 - Spring Calving Bred Females                Solid As A Rock Sire Group
                                                                              16 - Spring Calving Black Females  Reynolds Herefords
                                                                                      Bred to Hereford Bulls
                                                                              8 -    Fall Calving Pairs          1071 County Road 1231
                                                                              6 -    Show Steer Prospects
                                                                              Both Horned & Polled Offered        Huntsville, MO 65259
                                                                                                          Home: 660-277-3679 • Matt: 660-676-3788
                                                                               November 5, 2010 Sale offerings on
                                                                                      Display 3:00 P.M.
                                                                                    CHB Dinner at 6:00 P.M.        • Barb: 660-676-4788
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