Cattle Call is an original production of the Nebraska Rural Radio Association and is presented Blue Chip Herefords – Oxford, Nebraska.
Another wave of extreme summer heat may be leaving a bigger mark on the cattle market than outright death loss.
That’s according to KKV Trading’s Brad Kooima who pointed to reduced performance, lighter production and improving boxed beef values helping to stabilize the market following weeks of sharp volatility.
Kooima said while the reopening of the Mexican border and uncertainty surrounding the Cargill Fort Morgan plant grabbed headlines, the effects of prolonged heat across cattle-feeding regions could have longer-lasting implications.
“I think the death loss by itself probably isn’t a market factor. But when you peel that… cattle lose 50, 75, maybe 100 pounds,” Kooima said. “We’re feeding cattle now to a bigger weight than we ever have, and those are the cattle that are most vulnerable to that situation.”
Kooima said lost performance across surviving cattle may ultimately have a greater impact on beef supplies than the number of cattle that died during recent heat events.
The reduced production comes as packers continue to run lighter slaughter schedules, helping lift boxed beef values after weeks of weakness. Kooima said seasonal demand ahead of Labor Day is also beginning to provide support.
“Finally a little life here lately,” he said. “The very, very light kill… gives you a little bit of a chance to bounce. But there also is the beginnings now of this Labor Day deal, where we start to shift… back into maybe a steak feature, a grilling-type feature.”
Even so, Kooima cautioned the improvement could prove temporary if feedlots continue holding market-ready cattle in hopes of recovering weight lost during the heat.
“I do think we can rally the beef a little bit more,” Kooima said. “I think we can rally cash out a little bit more… but sometimes after we have those holding-action situations, all of a sudden you find out, ‘Now we’ve got a few more big cattle than we thought we had.’”
While market fundamentals have improved from two weeks ago, Kooima said producers should remain cautious heading into the fall as larger carcass weights and delayed marketings could pressure prices later this year.
Other topics discussed:
- Mexican border reopening to cattle imports and market reaction.
- Cargill’s Fort Morgan, Colorado, plant labor dispute and processing capacity.
- Recent cattle inventory and heifer retention figures.
- Comparison of today’s cattle cycle with the 2014-16 market downturn.
- Seasonal demand trends and Labor Day beef buying.
- Market leverage between packers and feedlots heading into late summer.