Current Cattle Market Daily Headlines for February 24, 2021

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According to Hugh Sanburg, 2021 Chair of the Cattlemen’s Beef Board and a Colorado cow-calf producer, if the beef checkoff were to be done away with like certain interest groups would like to see done, cattle producers across the nation would be heavily impacted.
Not only would national beef promotion be impacted without a federal beef checkoff, state checkoffs would also feel the affects.
- Last year, 44 states received checkoff revenue for local-level beef programming and only 15 of those 44 states have their own state checkoff in place, said Sanburg.
  - If the checkoff were to dissolve, the majority of state beef councils would have very minimal resources for funding their state beef initiatives.
- Sanburg questions who would promote beef if the checkoff were not in place to do so. He feels that those suggesting ending the program have not considered the void that its termination would create.
- The beef checkoff isn’t in place to control the markets, said Sanburg, but it does support producers in a lot of ways.

Much like 2020, packing capacity has already been disrupted this year. In the past two weeks, producers have seen capacity cut short due to maintenance and extreme weather conditions.
Intense winter weather last week resulted in rolling blackouts and natural gas restrictions at plants from south Texas all the way up to the Corn Belt.
- Weather conditions have improved, but energy limits are still causing issues for plants.
  - All of this combined has created an estimated 70,000 head backlog of cattle.
- The frigid temperatures with this winter storm will undoubtedly affect carcass weights for the next several weeks.
  - Cattle shipped to plants last week averaged 30-60 lbs. lighter than the week before, but the actual effect of these extreme temperatures on cattle weights is yet to be seen.
- It is unknown how the rest of the winter season will play out in terms of cold weather and snowstorms, but what is known is that the Cargill Meat Solutions plant in Schuyler, NE is planning for refrigeration maintenance starting March 18.
  - This shut down in Schuyler will allow processors a favorable leverage position relative to cattle feeders for a little while longer.
    - This leverage is obvious when a person looks at the spread between February live cattle futures and April and June contracts. The February contract is at a near-record discount compared to the spring and summer contracts that follow.

This is the first time since November that boxed beef prices have topped $240/cwt.
It is expected that boxed beef will remain well supported through this week, until production can increase enough to cover last week’s lost supply.
The range of guesses for this week’s slaughter are 650,000 hd. to 669,000 hd., all depending on who you ask, but in the end, it will all come down to how many plants run on Saturday.
Packer margins continue to average over $300/hd. net profit, so the incentive to run is definitely present.