We are seeing a disturbing trend in small to mid-sized feeder lots.
They are sitting empty, while the packer-owned lots are running at full capacity. R-Calf USA CEO Bill Bullard warns that it could lead to a decline in independent farm feeders.
“We have extremely high prices because of the incredibly tight supplies, and that means the feeder cattle that would be moving into feed lots are in short supply, and so those prices have skyrocketed to never-before-seen prices. However, the fat cattle market is not keeping pace with the feeder cattle markets. That means there are a lot of independent feeders out there that would like to. Fill their feed yards, but they can’t pencil out a profit, nor can they hedge their purchases.”
Bullard adds that this situation could further reduce market outlets for cow-calf and yearling operators.
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The National Cattlemen’s Beef Association (NCBA) and Public Lands Council (PLC) are praising the passage of a bill to delist gray wolves as an endangered species by the U.S. House last week.
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Recent USDA export sales data show China has been active in the U.S. market, but analysts tell RFD-TV News that the timing is a key clue.
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Tight feeder supplies and lower placements indicate continued support for the cattle market, with regional impacts heightened in Texas by reduced feeder imports.
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Cattle markets are watching the Cattle-on-Feed Report for signs of tighter supplies, while USMEF warns limited China access is cutting producer profits.
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