Cattle Market Keeps Disappointing

 A Handbook for Ranch Managers By Cassie Fish, CassandraFish.com

The summer of 2015 has in some ways been the opposite of last summer when the cattle market outperformed every expectation. This summer, week after week small kills and tight fed cattle supplies are met with a wave of various bearish or limiting market factors, many originating globally—hide backlogs, struggling exports and burgeoning imports. The market has dismissed the importance of tight cattle supplies, focusing instead on whatever negatives come into play. A couple of weeks ago, hope had been renewed only to be dashed again late last week.

Right Here at Home

Planned Grazing: A Study Guide and Reference Manual   When Tyson Fresh Meats announced the closing Friday morning of its antiquated Denison, Iowa cattle slaughter-only facility, futures sold off hard. Though that closure had been part of a long-term plan, the timing of it had been unknown and it was viewed as a blow to the cash market, at least psychologically and put cattle feeders back on their heels. Packers backed off on bids. A few cattle eventually traded at $150 in Kansas, which was steady, to $151 in Colorado and western Nebraska, $2 lower. The Corn Belt traded pretty much steady, $236-238. But volume was limited and some cattle feeders carried cattle over into this week, which is being viewed as bearish.

Environmental & Natural Resource Economics: The Austrian ViewPackers do need inventory for some plants this week coming off of last week’s light buy, and there are tops bids from all 4 major backers in Texas this morning. But market psychologically is leaning the packers way thus far.

Combat Shooter's Handbook Reconnaissance Marine MCI 03.32f: Marine Corps Institute The Betrayed: On Warriors, Cowboys and Other MisfitsOnly time will tell if and how the 1200-1500 head a day being killed in Denison will be absorbed by other packers in the area, by Tyson or its competitors. Packers are certainly interested in running more hours if they can do so profitably because improving capacity utilization is a primary way to lower kill costs, a big component in plant P&Ls. A regional packer was thought to run 6 days last week, and last week’s kill did edge up to 540k, up 5k from the prior week, down 40k from a year ago. Within a 200-300 mile radius, plants might be running from 32 hours a week to 38 hours a week. There certainly is a belief that there aren’t enough cattle around to run many more hours and some argue that beef demand has ratcheted back to the point that demand can’t absorb bigger kills at current price levels.

         Boxed Beef Top in Sight?

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1)  The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3)Bears are already beating the drum that boxes will top by Thursday this week, though some years strength continues into the last week in August. Boxes typically correct into September and this year is expected to follow that seasonal. Cash cattle prices typically average slightly lower in September than in August but usually above the July low. If so, this market may be in for a lot more going sideways than anything else.

         Futures Down Again

CME cattle futures checked Friday’s lows already this morning and Aug LC is losing big-time to the rest of the field, reflecting the disappointment felt in the cash market, when just 2 weeks ago the market gapped higher, confident the worst days were behind it.

Copyright © 2015 The Beef Read. All rights reserved.
The Beef is published by Consolidated Beef Producers…for more info click here.
Disclaimer:  The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.

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Planned Grazing: A Study Guide and Reference ManualPlanned Grazing: A Study Guide and Reference Manual. This is the ideal squeal to A Handbook for Ranch Managers.  Although the ecological principles remain the same, what was originally known as “The Savory Grazing Method” now answers to a multitude of different names: ranching for profit, holistic management, managed grazing, mob grazing, management intensive grazing, etc. Land & Livestock International, Inc. uses “Restoration Grazing” under its “Managing the Ranch as a Business” program.” No mater what you call it, this summary and synopsis will guide you step by step through the process and teach you how to use it as it was originally intended. No more excuses for failing to complete your grazing plans.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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