Kansas Feedlots Trying To Market More Cattle

It seems Kansas feedlots are trying to market heavyweight cattle.

Data collected and assimilated by Kansas State University agricultural economists indicates statewide feedlot sales to packer buyers in November were the highest in years, while the final weights of steers declined slightly from October’s high.

K-State Extension surveys sample feedlots around Kansas monthly and extrapolates the data to make assumptions about the overall trends of feedlot activity across the state.

Making the case that Kansas feedlots are marketing heavy cattle are data showing average feedlot marketings in November were 4,455 head, the highest of the year and up 629, or 16.4%, from 3,826 in October.  November’s sales also were up 2,012 head, or 82.4%, from the 2014 November rate of 2,443, and they were up 1,902, or 74.5%, from the 2009-2013 average.

Some argue that lower-than-expected beef prices in the fall led to an assumption that prices would continue to decline.  This led packers to play the market from the short side, and when a winter storm hit areas where packers owned cattle they suddenly had to step in and buy more from the open market.

However, the data indicate packers already were buying more cattle before the storm hit.  What seems more likely is that beef buyers were the ones playing the market from the short side, milking weekly product price declines for all they were worth.  The storm was just the fuse that set off December’s explosive rally, which was led by futures.




But sales aren’t the whole story.  Final weights of steers leaving Kansas feedlots declined a bit in November.  While this is a seasonal trend as temperatures cool and cattle use more feed energy to maintain body heat, the decline is significant when combined with the marketing data.

And, as prices for fed steers leaped higher in December, it would seem to be safe to expect December feedlot marketings will be up as well.  The reasoning would go that if beef bookings are up and cattle weights are lower, packers will have to kill more animals to meet beef poundage demands.




Cash trade Wednesday remained at a standstill with packers showing little interest.  Live bids were undefined, but feeders were asking $140 to $142 per cwt on a live basis.  Dressed-basis bids were posted at $210 to $212.

Last week, cattle traded at $133 to $136 per cwt on a live basis, with most trades at $134 to $135, up $9 to $12 from the previous week.  In dressed markets, cattle traded from $210 to $212, up $10 to $12.

The USDA reported sharply higher wholesale beef prices again on Wednesday in good volume.  Choice was up $5.72 per cwt from Tuesday to $228.03, and select was up $4.07 at $220.68.  The choice/select spread widened to $7.35 from $5.70, and there were 98 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Tuesday was $166.91 per cwt, up $0.68.  This compares with the Jan settlement Wednesday of $168.32, up $0.55.