Smallest herd in decades Beef packers see negative margins as problematic weather adds to supply challenges
CHICAGO, Ill. (Reuters) — Prices for slaughter-ready or cash cattle in the U.S. Plains hit an all-time high Nov. 14, fueled by an early winter storm.
The U.S. herd is the smallest since the early 1950s.
Some beef packers paid record cattle prices of US $171 to $172 per hundredweight in parts of Kansas and Nebraska, which topped the previous high of $170 set in late October and was up as much as $5 from sales two weeks ago.
Early wintry weather blew across the Midwest last week, packing heavy snow in the northern Plains along with bitterly cold temperatures that stretched as far south as Texas.
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“We got an added boost from the weather market,” said Jim Robb, director of the Livestock Marketing Information Center.
Frigid temperatures made it difficult to sort cattle and treacherous driving conditions snarled transportation of cattle to packing plants.
Inclement weather forced packers to spend more for cattle after they tried to by them hand-to-mouth in recent weeks to realign their deeply red margins, said Robb.
Beef packer margins were a negative $83.95 per head Nov. 14, compared with a negative $83 Nov. 13 and a negative $109.70 a week earlier, according to the analytics firm Hedgersedge.com. The storm crimped already scarce supplies, the result of several years of drought that damaged crops and shrunk the herd to its lowest level in 63 years.
“Packers are chasing the market that has these very tight cattle supplies,” Robb said.
