The bears are building in the cattle market
- Cattle markets have been favorable over the past two months as feeder cattle prices increased significantly, cash cattle prices have slowly climbed higher, and the board has rallied with the cash markets.
- Feeder cattle contracts hit their low in April at $118 and have since risen to $144 in just three and a half months.
- According to DTN Livestock Analyst, ShayLe Stewart, the cattle market is due for a correction.
- Stewart warns that often times the fall market becomes saturated with too many cattle, inhibiting the market’s ability to rally.
- The majority of the live cattle market’s strength goes hand in hand with Labor Day coming up. Whether or not packers will continue to be aggressive in the cash cattle market after the holiday weekend is anyone’s guess.
- Cattle producers need to pay close attention to how the market moves in the coming weeks. Feeder cattle will be well tested, stated Steward, as both the Superior Livestock Auction and Western Video Market are selling thousands of feeder cattle this week.
Parts of Nebraska seeing major drought for the first time in 8 years
- Last year at this time, many people in northeast Nebraska were recovering from the devastating floods. However, this year they are dealing with significant drought conditions.
- According to the latest drought monitor released on Thursday by the University of Nebraska-Lincoln, approximately 12.6% of the state is in severe drought conditions.
- That number is almost double compared to the week prior, and just a few weeks ago there were no severe drought conditions anywhere in Nebraska.
- Cuming County cattle and grain farmer, Joe Knobbe, said that the drought conditions have added stress on farmers in his area “on top of an already rugged 2020.”
- He went on to say that high yields have dwindled with the absence of rain. Lower corn yields could possibly increase the price of feed and also lead producers having to source it from farther away, which increases costs.
- Neighboring states are also experiencing drought conditions.
- Iowa has about 6% of its area in extreme drought.
- Colorado has 61% of its area in severe drought, and nearly 24% in extreme drought.
Boxed beef prices
- Choice boxed beef: $220.86 (+3.60)
- Select boxed beef: $204.65 (+2.71)