Direct feedlot trade was at a standoff late Friday with bids of $124 passed by many and asking prices at $127 to $130. Packers bought a few cattle in Kansas and Texas late at $124. AMS reported prices on 1,400 head sold on Thursday at $125, up $1 from last week. Cattle sold on a dressed basis at $197. Packers have seen their historically large margins of the past year erode to under $90 per head, which leads many to believe they will try to hold firm on prices. Cattle feeders, however, are gaining leverage.
Feeder cattle sold at auction $2 to $6 lower across the nation this week. AMS reporters said the larger drop in the market occurred in regions affected by Winter Storm Gia last weekend and the forecasted Winter Storm Harper this weekend.
“A vast area of the Plains states are dealing with excess moisture this time of year with more on the way,” AMS said. “Feedyard pens are in poor to very poor conditions and forecasts for extremely cold temperatures for a few days after the moisture rolls through. Cattle performance has deteriorated along with the conditions. In addition, lost weights and carcass yield losses will no doubt show on the cattle feeders' bottom line.
The Choice beef cutout closed Friday at $213.15, up $0.69 for the week. Select beef cutout traded at $209.45, up $3.18 for the week. The Choice-Select cutout was $3.70.