Last week’s snow storm limited the number of market-ready cattle across the southern Plains forcing packers to pony up extra cash for animals. The snow also made it difficult for trucks to deliver to packing plants which limited beef production, translating to even higher retail beef prices. Our Monday Market Sentiment panel expects gains to carry into this week with an increase of 70 cents to $128.49 per cwt.
The Monday Market Sentiment is a forecast of the upcoming weekly cash trade (5-Area weighted average price) prices reported by the USDA. This week’s prices exploded with an increase of $4.06 to $127.79. Reuters reports the increase was the market’s largest in a year. Last week’s gains added to the previous week when the cash market improved by $1.02.
Fewer available cattle at packing plants will force retail beef prices higher this week and may force consumers to curb beef purchases. Beef demand is already lackluster with record high prices and a recent increase in gasoline prices also weigh on family budgets. According to Reuters, retail beef prices are at the highest ever, rising to $5.24 per lb for benchmark choice cuts in January, according to the U.S. Agriculture Department.
University of Missouri extension agriculture economist Ron Plain doesn’t think beef prices will subside either. "I don't think the record (in January) is going to last for the year," he told Reuters. Last week’s snow storms and cold weather made it difficult for cattle to add weight.
Each week the Cattle Trader Center, on behalf of Vance Publishing, awards a $100 gift certificate from Cabela's to the industry leader whose forecast comes closest to the 5-Area cash trade number reported by the USDA. The most recent winner was Mike Binns, Brookover Cattle.