Feeders have blood all over them, $400/hd losses are common. Packers were all red until 6 months ago but not nearly like feeders. Up until 6 or 8 years ago, a carcass bigger than 950# was heavily discounted - I wondered when they changed the rule what would happen in a period of cheap corn. Btw, the only reason feeders can feed to current weights is the Cowman thinks he is maximizing profit by raising high frame score cattle. Frame 5 or 5.5 cattle just can't be fed so big. Some feeders have lost so much money their lender shut them off, some feeders got smart before they got broke. I haven't seen profitable feeder cattle in years; some made money on a bad gamble. The thing about these losses in the feeding sector is cattlemen were betting on the come when they placed them. Usually winter cleans up heavy cattle, but it's been pretty mild so far.
Tx,Ok,&Ks are all short of cattle wanting to expand. Think about the cattle saved for expansion taken out of the supply chain (until sold as culls). Drought took the south out of the cow business, but that's over. Get ready for the market skirmish because the south can raise calves for $1.25 and damn near like it. Expansion is a delayed effect, thus if you're looking at empty pastures at medicine lodge today, you're thinking about feeder losses (so you don't want to buy feeders), but $1000 steers are making money. The heifer you buy today, breed in May-16, calve in feb - 17 isn't going to exert supply pressure until sometime in 18.
The good news is there's plenty supply to be reduced in the feedlot with lighter weights. But part of the high calf prices comes from cheap corn. Higher corn will reduce carcass weights, but high corn comes off the price of calves.
Right now oct 16 feeders are just south of $1.60 (that's for 850# steers) so figure whatever premium for 600# bawlies.
Fats are taking a hit, but April 17 at $1.25 probably should have been shorted.
:lol:
