Cattle Industry Groups Hold Closed-Door Meeting to Discuss Price Imbalances
The groups, typically at odds, telling AgDay they were on the same page and in agreement about possible changes and solutions.
One representative saying a tangible solution will come out of the meeting including a possible announcement this week.
This meeting comes as the latest Sterling Beef Profit Tracker showed packer margins hit $929 per head. Which is an increase of more than $260 per head in the past week.
Beef packer capacity is currently estimated at less than 90%, AgDay reports. Meanwhile, cattle prices held steady at $119 per hundred, and average feedyard margins were positive at $87—even as finishing costs go up.
Oklahoma State Livestock Specialist Derrell Peel says spiking feed costs—along with a backlog of cattle—aren't helping producer margins right now.
“One of the big ones at the moment is that we simply have a very large supply of fed cattle, and not enough packing capacity to process at all,” Peel says. “We've been aware for several years that packing capacity had gotten down to a point where it was kind of imbalanced with cattle numbers, and actually now is a little bit shorter what we need."
Peel says some packers are working Saturdays, and even with the Saturday kills, they can't keep up.