U.S. cattle producers rally around the Cattle Market Transparency Act of 2021
- On Tuesday, U.S. Senators Deb Fischer (R-NE) and Ron Wyden (D-OR) introduced the Cattle Market Transparency Act of 2021.
- The bill has been introduced accomplish two goals: ensuring regionally sufficient negotiated cash trade and equipping producers with more information to aid marketing decisions.
- According to USCA Region 7 board member Lee Reichmuth, this bill builds off the recommendations provided by the USDA in its Boxed Beef and Fed Cattle Price Spread Investigation Report. It also stems from discussions producers are having across the nation in response to historically low cattle prices and a dysfunctional marketplace.
- Curtis Martin, USCA Region 1 Director, said that Covid-19 brought to light the need for diverse cattle markets. When packing facilities started experiencing bottlenecks in their line speeds during the pandemic, they first cut ties with independent producers, while corporate feeders were unharmed because of their contract agreements.
- Martin closed by saying that the Cattle Market Transparency Act pulls the meatpacker’s thumb off of the scale, and begins the rebalancing of negotiating power between packer and producer.
Current cash cattle prices are an insult to feedlots
- Since the first of the year, feedlots have strategized and marketed their cattle to the best of their abilities, but the cash cattle market has been held hostage at $114/cwt., according to ShayLe Stewart.
- Currently, boxed beef prices are the second highest they have ever been for this time period, yet cash cattle prices are the lowest they’ve been in the last ten years for this time frame.
- When you look back over the last ten years, live cattle prices have ranged anywhere from $124 to $158 for the end of February.
- Last week’s average of $114/cwt. was $10 to $44 weaker than what we’ve seen over the last decade.
- According to Stewart, packers have been able to pressure the cash cattle market and keep it from trading in the 10-year threshold of $124 to $158 by working diligently to build their captive supply for this timeframe.
- Last week’s cash cattle trade totaled 84,242 head.
- Ninety-one percent (77,087 head) of that total is committed for delivery in the next two weeks.
- The remaining 9 percent (7,155 head) is scheduled for delivery in the following 15 to 30 days.
- A positive through all of this is that very few cattle were procured last week that fall in the later delivery. With that being said, in the coming weeks packers will once again be able to get by without having to support the cash cattle market.
Profit Tracker: Cattle margins crumble hog margins solid
- During the last week of February, average cash fed cattle prices were steady with the week before at $114/cwt. Despite this, cattle feeding profit margins took a dive.
- For the last week of February, average feedyard margins were $14/hd., down $68/hd. from the week before, according to the Sterling Beef Profit Tracker.
- Closeouts showed increasing costs with $8 more per head for feed and $40 more per head for feeder cattle.
- This resulted in the cost for finishing a steer to increase to $1,538/hd., up from $1,498/hd. last year.
- Packer margins increased $33/hd. to an average of $430/hd. A year ago packer profits were $69/hd.
- The packer/feeder margin spread is now at $416/hd., up $110/hd. from the previous week’s $306/hd.
- The beef cutout increased to $239.19/cwt. One year ago the cutout average was $205.35/cwt.
There goes St. Patty’s Day: 149 tons of corned beef recalled
- A recent recall of 149 tons of ready-to-eat canned corned beef products couldn’t come at a worse time with St. Patty’s Day right around the corner.
- The corned beef was imported and distributed all throughout the U.S. without the benefit of FSIS import re-inspection.
- The issue was discovered after FSIS received a tip from an industry representative. So far, there have been no confirmed reports of adverse reactions due to consumption of these products.
Boxed beef prices
- Choice boxed beef: $234.68 (-4.35)
- Select boxed beef: $226.17 (-1.47)