Fed cattle costs pushed increased final week and set one other document weekly common value. The weekly 5-area common value two weeks in the past was $173.10 per cwt which surpassed the earlier peak value from November 2014. The common value final week rose even increased to $180.44 as cattle markets continued to achieve power.
Fed cattle costs are up over 14 p.c because the begin of the yr. Proven within the chart above, fed cattle costs have been in an uptrend since 2020 when costs dropped to a weekly common low of $94.87 in July 2020. Fed cattle costs had been highest final week within the Nebraska and Iowa/Minnesota areas the place costs averaged round $183 per cwt. Costs in Kansas averaged $176.09 per cwt whereas fed cattle costs within the Texas/Oklahoma/New Mexico averaged $174.52.
The boxed beef cutout additionally picked up steam final week and the selection cutout was was up practically $10 per cwt from the week prior. Common retail beef costs have been principally regular for over a yr, however tighter beef provides might put upward strain on beef costs if client demand doesn’t erode.
Feeder cattle costs are additionally being pulled up. Costs for feeder cattle and calves in most southern states are up 30 p.c or extra from a yr in the past (desk under). CME Feeder cattle futures contract costs are round $230 per cwt for the autumn contracts. There are value threat administration alternatives to contemplate. In a market like this one the place costs are rising, producers could also be all for not limiting their market upside. Put choices and Livestock Threat Safety (LRP) are each instruments that may assist shield draw back value threat whereas additionally leaving producers open to learn from increased costs. Every of those instruments has their very own design and tradeoffs to know earlier than leaping in, and there are definitely different threat administration methods on the market. Nevertheless, all instruments are presently providing threat administration alternatives at value ranges not seen up to now eight years.
