Latest / Professional Ag Marketing Podcast / Inside the Beef Market | Cattle Talk March 13th, 2026

Transcript

Inside the Beef Market | Cattle Talk March 13th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_01: Welcome to the Candle Talk Podcast.
• 0:05
  SPEAKER_01: Your weekly breakdown of Cattle Market Fundamentals, the news, and the insight in the industry, trading commodity futures and options involved with a potential risk of luck and is not suitable for all investors.
• 0:22
  SPEAKER_00: Today is March 13th.
• 0:24
  SPEAKER_00: This is Jeff Hogendorn.
• 0:26
  SPEAKER_00: We are missing Mike Minor here this afternoon.
• 0:29
  SPEAKER_00: He's out and about doing some traveling.
• 0:31
  SPEAKER_00: So we have uh myself and Nick Bork with us today.
• 0:35
  SPEAKER_00: Welcome, Nick.
• 0:36
  SPEAKER_00: Thank you, Jeff.
• 0:37
  SPEAKER_00: Um, so we're I think to start off, Nick, since Mike's not here and we haven't done this much on this podcast, why don't you go ahead and give us a little introduction?
• 0:46
  SPEAKER_00: You know, Nick and I have uh very similar jobs here at ProAg um and what we do you know throughout each day.
• 0:53
  SPEAKER_00: Nick, why don't you kind of start us off by discussing a little bit about what we do each day and how we work with producers?
• 1:00
  SPEAKER_02: Yeah, we work with cattle producers today to kind of navigate through these markets and and help make good risk management decisions.
• 1:08
  SPEAKER_02: The way that's evolved today is kind of utilizing a lot of LRP and LGM uh to get floras on these cattle in this stage of the cycle.
• 1:17
  SPEAKER_02: And and um yeah.
• 1:20
  SPEAKER_00: Yeah, it's kind of the favorite part of our day, I think, is just those one-on-one discussions with producers, you know, um analyzing the market and trying to get them in the best position we can we can possibly do.
• 1:33
  SPEAKER_00: Um to get to get us started here, why don't we talk a little bit about box beef?
• 1:39
  SPEAKER_00: And you know, a lot of things have happened this past week, Nick.
• 1:41
  SPEAKER_00: We've had um movements in both the beef and the cash, and leverage is looks a whole lot different than what it did two weeks ago, doesn't it?
• 1:50
  SPEAKER_02: Yeah, it sure does.
• 1:51
  SPEAKER_02: We've had like a$50 rally in choice beef since the first of the year.
• 1:56
  SPEAKER_02: Um, and and uh you know that's that's approaching the$400 level here.
• 2:02
  SPEAKER_02: So we're gonna test some demand early on here, or earlier than normal, I guess, earlier than seasonally normal.
• 2:10
  SPEAKER_02: Usually that doesn't start kind of till that April-May time frame.
• 2:14
  SPEAKER_00: If you're watching the video here, I mean he's got the chart up there, and it really looks you can see how abnormal this rally is right here in this time of year, can't you, Nick?
• 2:23
  SPEAKER_02: Yeah, for sure.
• 2:25
  SPEAKER_02: So uh obviously cash cattle dropping a little bit this week now down to 235.
• 2:31
  SPEAKER_02: Packer margins have definitely increased here.
• 2:33
  SPEAKER_02: I know you're gonna talk a little bit about that too, Jeff, but uh we're definitely seeing kind of a leverage shift here.
• 2:40
  SPEAKER_00: Yeah, and I think we're you know, to follow up the demand discussion, um, you know, we've we've everybody's been nothing but impressed uh how well the U.S.
• 2:49
  SPEAKER_00: consumers have been willing to take on these higher beef prices in the past, you know, 12 to 18 months, right?
• 2:55
  SPEAKER_00: Um but we do continue to push that envelope and and and keep leaning on that uh portion of of our business, I would, I would dare to say.
• 3:06
  SPEAKER_00: So I mean, if you think about retail prices, I know we've talked about this before too, but they're gonna continue to go up this year.
• 3:12
  SPEAKER_00: What Nick was referencing with those choice box beef values, you know, this sharp increase this in early in the season, it's gonna get really interesting.
• 3:21
  SPEAKER_00: Do we see retail prices do something similar to that, maybe even before you get to the time of year where you can really uh expect to experience that demand, right?
• 3:33
  SPEAKER_00: As you get into that mid-April into May-June um time frame and start looking at some of our grilling season.
• 3:40
  SPEAKER_00: So that's what we're gonna be watching awful close on the demand side of the thing.
• 3:44
  SPEAKER_00: Um, what I wanted to talk about a little bit, and Cade, maybe you can throw that uh weekly slaughter or weekly harvest chart back up there.
• 3:52
  SPEAKER_00: You know, we've Greeley Colorado, of course, is is experiencing some downtime here and been dark this week.
• 4:00
  SPEAKER_00: Looks to us at least, and things can change a fluid situation.
• 4:04
  SPEAKER_00: It looks like it sure might be darkened to next week, too.
• 4:06
  SPEAKER_00: So it has us, you know, kind of asking the question of okay, is this really a bottleneck?
• 4:13
  SPEAKER_00: Is this really a problem?
• 4:16
  SPEAKER_00: Um, you know, so where we can get into some really disappointing markets is when we can't physically get the animals through the plants um in a timely fashion, right?
• 4:27
  SPEAKER_00: And and of course, as you think about big cattle, some numbers that are probably backed up a little bit, been on feed, you know, much longer than what they're used to being on feed.
• 4:39
  SPEAKER_00: So the the feedlots are you know looking at some limited um availability as far as how long they can keep them around.
• 4:46
  SPEAKER_00: That's where you can get into a really dangerous situation.
• 4:49
  SPEAKER_00: So we spent some time on the numbers, been killing uh somewhere's in this 520,000 a week type of a time frame.
• 4:57
  SPEAKER_00: Um, you know, if you think about Lexington plant closing, Amarilla plant being cut down to a single shift, and then now we've got the issues at Greeley.
• 5:08
  SPEAKER_00: Um, but you know, the way it looks to us, we can still uh be killing somewhere in that uh you know 570, maybe 580,000 a week really easy, like Monday through Friday.
• 5:25
  SPEAKER_00: And you can kind of expect, you know, to add a little bit of Saturdays.
• 5:29
  SPEAKER_00: I think we're gonna start to seeing just a little bit of Saturday kills uh coming in here, maybe 20 to 30,000.
• 5:35
  SPEAKER_00: So it looks like you know, 600,000 a week or on all uh total cows, calves, and fed animals seems to be a very reasonable um kind of low water mark.
• 5:48
  SPEAKER_00: You know, it shouldn't be too hard to accomplish those type of kills.
• 5:52
  SPEAKER_00: Um so we're sitting here down at 520, 525.
• 5:57
  SPEAKER_00: Um, there should be plenty of room in there.
• 5:59
  SPEAKER_00: We shouldn't be experiencing a really big bottleneck as far as total available shackle today.
• 6:08
  SPEAKER_00: Um, Nick, that goes back to the whole leverage discussion.
• 6:11
  SPEAKER_00: Um if you want to, you know, hit on that a little bit further as far as packer margins go and and what you think might happen here as far as um leverage between packers and feed yards.
• 6:23
  SPEAKER_02: Yeah, I think that's kind of the question going forward.
• 6:26
  SPEAKER_02: You know, obviously they've gained some leverage back here this week with boxes moving to where they have and and the cash price five bucks lower in that 235 area this week, which it does look like they bought about 30 we were able to buy about 30,000 head yet, primarily in the north, obviously.
• 6:46
  SPEAKER_02: Um but I think as you go forward too, it's gonna be interesting to see how long or how comfortable they are staying kind of at these kill levels because we're not we're likely not killing um enough, at least relative to to the available supply for the year, right?
• 7:04
  SPEAKER_02: You know, the the number of cattle that we ought to be killing weekly.
• 7:08
  SPEAKER_02: And it's gonna be kind of questionable, I think, how how willing they are to stay at these levels, even though their margins may be creeping back.
• 7:18
  SPEAKER_02: Um you know, if and and you know, already this week, like you're saying, Jeff, we're gonna kill 17, 20,000 on Saturday.
• 7:26
  SPEAKER_02: So they're already willing to step that up a little bit.
• 7:28
  SPEAKER_02: Some of that has to do with the greeley deal, but but I think um if they maintain these harvest levels even as their margins are coming back, we definitely um could see a a a more severe loss of leverage, I'll say it that way, in in that April-May time frame.
• 7:46
  SPEAKER_02: And um, you know, that will kind of be the the key because I think if the if they gain leverage back in that time frame, then then you know they're probably able to keep that going into the summer and fall.
• 7:59
  SPEAKER_00: Yeah, I like the the chart that Cade had up there here a few minutes, and maybe he'll throw it back up there for us.
• 8:04
  SPEAKER_00: That you know, there's been very few times over the past 12 to to grow and on uh 14 months here where we're where our model was suggesting that Packers had a positive margin, you know, really a couple times last um summer, early fall there, and then of course the that November time frame um when futures really went down off of some of the administration's discussions on uh you know trying to lower beef prices, right?
• 8:30
  SPEAKER_00: That let them buy some cash cattle cheaper for a bit.
• 8:34
  SPEAKER_00: Um the most of those were very short-lived, um, but we really didn't see a huge increase in shackle space uh shackles speeds.
• 8:47
  SPEAKER_00: Um, you know, a slight one maybe in July there, a slight one in September.
• 8:52
  SPEAKER_00: The really big one came back in November.
• 8:55
  SPEAKER_00: They really increased their kills.
• 8:57
  SPEAKER_00: Um, and it looks like that might have been a mistake.
• 9:00
  SPEAKER_00: And I don't know if that was just because they felt like the the cattle were a really good buy at those type of price levels.
• 9:07
  SPEAKER_00: That's certainly the price action that we've seen after that event.
• 9:10
  SPEAKER_00: That's the way that looks.
• 9:11
  SPEAKER_00: But um that's that's why it's it hasn't stuck.
• 9:15
  SPEAKER_00: The the positive margins from the Packer standpoint haven't stuck around very long.
• 9:19
  SPEAKER_00: Um it's gonna be really interesting what they do with this time around.
• 9:22
  SPEAKER_00: If they add some to the kill, which we talked about, they got plenty of room to do that, and we're really low levels.
• 9:28
  SPEAKER_00: Um, and then you know, how do cash prices respond?
• 9:32
  SPEAKER_00: You know, all those things above are gonna be uh some things to watch here really closely over the next few weeks.
• 9:40
  SPEAKER_02: Yeah, definitely.
• 9:41
  SPEAKER_02: I think too, like when you look at today's domestic supply of beef, too, like we are we're importing um 11-12 percent of our of our supply, and that slowly dwindles here as you go from here on out through the year.
• 9:56
  SPEAKER_02: You know, there's some quotas from from Argentina and Brazil that get hit early on here in the year, and that so those imports slowly dwindle as we go from here.
• 10:06
  SPEAKER_02: And so Packers are gonna, you know, from that perspective, we'll have the ability to take choice even higher just because the you know more of the domestic supply has to come from our own supply, unless we make some, you know, drastic changes to the to the to the whole import schedule there.
• 10:23
  SPEAKER_02: But we'll see how that goes.
• 10:25
  SPEAKER_02: And and you know, there certainly is talk that you know choice can can move into that 450 level here, even once we hit the the heart of our uh of our you know of demand going into grilling season.
• 10:40
  SPEAKER_00: Some pretty good demand signals there considering how much we're importing um the prices that we're importing it at, and the consumer seems to want to chew, continue to chew through it, no, no question about it.
• 10:51
  SPEAKER_00: Uh, you know, the item that we've missed here this week a bit, Nick, is the whole um Iran situation and you know the the energy markets, crude oil, um and and driving these equities up and down this week.
• 11:05
  SPEAKER_00: And and cattle have been very much tied to that situation.
• 11:09
  SPEAKER_00: Um I think that's a topic we'll probably leave for next week, quite honestly, and um and and hopefully get into that discussion in in the next time that we're around.
• 11:20
  SPEAKER_00: Other than that, appreciate everybody tuning in.
• 11:23
  SPEAKER_00: Um there is a link in the description below.
• 11:26
  SPEAKER_00: Uh if you guys are interested in more of this type of content, go ahead and click on that.
• 11:30
  SPEAKER_00: Otherwise, everybody have a good weekend.
• 11:32
  SPEAKER_00: Thank you.