Monday this week started off with bad news from the JBS – Grand Island, Neb., packing plant with a fire in the facilty’s rendering area. With the 2019 Tyson – Finney County, Kan., fire all too fresh on the minds of cattlemen and protein buyers, the apprehension and market reaction felt on Monday was immediate.
However, reports came in swiftly on Monday afternoon that harvest production at the JBS plant would resume on Tuesday, which it did. The estimated federally inspected slaughter on Monday was logically smaller at 114,000 head but up to 120,000 head again on Tuesday.
Live cattle futures this Monday were sharply lower in a knee-jerk reaction to the above news, yet recovered nicely as it became apparent that the plant would resume slaughter quickly. Yet, cattle futures have been under pressure since late August as the cash fed cattle market has failed to perform. The October 2021 Live Cattle contract reached a high of $131.62/cwt. on August 25 only to lose value each of all but two days up through last Friday when it closed at $123.42/cwt. A similar pattern can be seen across the deferred Live Cattle contracts, but there
was a decent recovery this Tuesday as the market found support.
Fed cattle supplies in the country remain relatively ample with a continued wide spread between the northern prices from $124 to $127/cwt. versus the south trading in the range of $123 to $124/cwt.
Carcass cutout values have been on the decline at the conclusion of Labor Day demand and continued lower early this week. Urner Barry’s Choice cutout reached a late August summer high of $340/cwt. and had retreated to $327/cwt. as of this Tuesday. The quality spreads remain quite wide with the Choice/Select spread testing record territory again, currently at $32.70/cwt., just $5/cwt. off of the June 23 record
daily high of $37.90/cwt. in the Urner Barry data. The CAB/Choice spread is not near the $33/cwt. high seen this May, but the current $16.30/cwt. spread is near last year’s record of $17.93/cwt. for this particular week. Skyrocketing ribeye prices are a driver.
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