Cattlemen will long remember the incredible bull run of 2014. And it may not be over.
Cash cattle prices took out highs set back in March this week, a feat few expect from a June market. But this June market is unlike any we’ve seen before. Much of the rally has been fueled by strong beef demand at a time when market-ready supplies are tighter than expected.
Cash fed cattle traded a whopping $4 to $5 per cwt. higher in the South at $154-$155, and $7 per cwt. higher on a dressed basis in the North at $245. Cash fed cattle prices are roughly 25 percent higher than the same time last year.
Futures markets have staged their own rally, but they’ve been unable to catch the cash market. June Live cattle closed Friday at $152.75, while both October and December closed above $154.
If the fed cattle market was hot this month, the feeder cattle market has been scorching. Market reporters ran out of superlatives weeks ago to describe the activity, and now just resort to the old standby "unbelievable."
Calves and yearlings sold $4 to $10 per cwt. higher this week "on unbelievable demand and incredibly active trading," says USDA Market News reporter Corbitt Wall. "The market officially surpassed even the wildest of dreams with the largest advance on 6-weight feeders and the least on those weighing over 800 pounds."
Wall noted that "this week’s bell-ringers sound like tall tales," as the stockyards in Bassett, Neb. Reported 500-515-pound steers fetching $304 to $310 per cwt.
Yet, what goes up must eventually come down, and Wall suggests that may weigh heavy on many cattlemen. "The feeder market has now grown to the point that industry members are more fearful of the fall than amazed by the continued rise," he says. "The top couldn’t be too far off and we may be several dollars from the peak but perhaps only a few weeks away."
Beef sales appeared strong ahead of the Fourth of July, with Choice cutout closing Friday at $245.98 and Select at $237.75. The Choice/Select spread was $8.23.
Slaughter cows and bulls sold mostly $1 to $3 higher. USDA's Cutter cow carcass cut-out value Friday morning was $212.00 per cwt., up $9.39 from last Friday.