Latest / CattleUSA Daily / 278: Volatility Is Back: Cash Collapses and War Headlines Shake the Cattle Market with Dan and Samantha

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278: Volatility Is Back: Cash Collapses and War Headlines Shake the Cattle Market with Dan and Samantha · CattleUSA Daily

• 0:00
  We are breaking down the cattle markets once again with Dan and
• 0:02
  Samantha and today they are on to share everything that we have
• 0:06
  seen over the past week and also share some thoughts as we go
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  forward into spring and what it means for the cattle market.
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  What we're seeing right now, we're talking about beef demand,
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  we're talking about world events, we're talking about the
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  war with Iran. We're talking about everything
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  else that is kind of playing into the cattle market right
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  now. The numbers that we are seeing
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  and the volatility that we have seen over the past week as well.
• 0:28
  Before we happen to today's episode with Dan and Samantha,
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  if you could take a second, If you're watching on YouTube, make
• 0:33
  sure you hit that subscribe button and like this episode.
• 0:35
  If you're watching on any of our other podcast platforms, make
• 0:37
  sure that you take a second to go follow the show and rate and
• 0:40
  review it as well. Without further ado, let's go
• 0:42
  ahead and hear from Dan and Samantha.
• 0:48
  Welcome to the Cattle USA Daily Podcast, your go to source for
• 0:52
  the latest livestock markets, industry insights and the
• 0:55
  updates shaping agriculture today.
• 0:57
  I'm your host Lauren Moylan, a passionate advocate for
• 1:00
  agriculture, here to keep you informed and connected.
• 1:03
  Now let's dive into today's episode.
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  Dan, Samantha, welcome back to the podcast.
• 1:15
  How are we doing? Samantha, how's Calvin going?
• 1:17
  I know you guys are probably in the thick of it right now, but
• 1:21
  how's everything going for you guys?
• 1:23
  We are kind of in the thick of it.
• 1:24
  We just started a couple weeks ago and the heifers always go
• 1:27
  first, so it seems like we get a few glitches in the system to
• 1:31
  start. But yeah, I mean, we had a set
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  of twins we've got one with somehow ended up with a cleft
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  palate on both sides of their mouth.
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  So he can't really suck, but he can swallow.
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  So it's one of those deals. And we're always the people
• 1:45
  that, you know, we don't, we don't put calves down unless
• 1:48
  it's like last resort and they're utterly suffering.
• 1:50
  So we are toughing through it. But yeah, it's going.
• 1:55
  Definitely in the trenches for sure.
• 1:57
  Dan, how's, how's Iowa treating you?
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  Life's great, life is great. It's sun doesn't go down until
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  6630 now. So you know, we're we're coming
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  out of winter. We're looking optimistic.
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  The grass isn't green yet, but we're coming around.
• 2:13
  For sure. I am just itching for the longer
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  days. Like, come on guys, I know it's
• 2:19
  just over the horizon. Let's push through.
• 2:21
  Let's persevere. I hope that March doesn't come
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  in like a lion. Right now in Kansas, it's
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  looking like we're going to get like a week's worth of rain
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  instead of snow. So I know a lot of people are
• 2:31
  really thankful for that. Except I the mud kind of sucks,
• 2:34
  I'm not going to lie on that. But it's better than a Blizzard
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  so I'll take it. Managed to get crap over here.
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  I mean, we got a light dusting early February and then we got
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  maybe an inch like mid late February, February, but it
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  wasn't even enough to wet the ground.
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  I mean no moisture in it. Yeah, send it all out your way,
• 2:53
  Samantha. I'll send you some here from
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  here from Northeast Kansas. So, well, on the topic of the
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  markets, what are we seeing this week?
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  What have we been seeing? And just kind of give us the
• 3:04
  rundown. Volatility continues.
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  I mean, seems like every time we reach new highs, the market
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  decides to correct itself like we're due for a correction.
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  So the last four weeks there, there was a lot of focus around
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  cash vats and then they folded, mostly strung by the feed lot.
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  So gave you lower cash early on Thursday and then that pretty
• 3:25
  much escalated to $10 losses by late Friday.
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  So, you know, you pair that with higher beef prices and then
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  suddenly the Packers are definitely sitting a lot better
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  off than they were and that transitions to the feed yard
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  being in worse, worse margin trouble than they were.
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  So I think Packer leverage was pretty much inevitably a
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  pressure point. I mean, we talked about it early
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  last week. We knew they bought a pile of
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  inventory that week before. They didn't need as much
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  inventory last week. And then as a result, they ended
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  up buying around, you know, 15,000 head last week over week,
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  they slashed slaughter by another 3000 head, which is
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  honestly crazy considering the week before was 516,000 head
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  that was already brushing historic lows.
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  So you think, oh, well, 3000 head, that's not very much, but
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  it is a lot when you're thinking 3000, another 3000 back off off
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  already historic lows. So just crazy things happening.
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  I think we keep seeing volatility from this, this
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  potential Greeley plant strike. And frankly, to me, it's one of
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  those deals where it's like shit or get off the pot.
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  It's like do it or don't, but stop talking about it.
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  I mean, like I said before, it's not a big deal to overall
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  slaughter capacity. A lot of these plants, they
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  aren't running to capacity as is I mentioned they cut slaughter
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  by another 3000 head that puts you anywhere in between 54 to
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  55,000 head back from this time of year ago.
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  So I mean that alone tells you they could easily absorb that
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  difference and kill somewhere else if they if they wanted to
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  is the thing. So cash feeders going through
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  the sale barn, they actually held pretty strong even with all
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  the volatility and futures last week.
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  You know, you throw much lower fed cattle in in the market late
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  last week and a weekend in between and and now we're
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  sending about 10 to 15 bucks on lower on Monday and on Tuesday.
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  So seeing a little pressure point there.
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  And then now we have a news headline that surfaced Saturday
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  that we're at war with the Middle East.
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  So lots of things going on in the cattle market, lots of
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  things going on in the world around us, just lots going on.
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  For sure, for sure. Dan, what are your thoughts?
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  100% it volatility is a big thing and and like the good old
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  days, it's been a while since we've actually seen this happen.
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  The good old days, you would see the futures dump and then the
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  basis traders take a hold of the market and push it lower.
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  Got started Monday morning and had some two 37238 trade basis
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  trading futures dump, same at the lower.
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  You know, I think there's some 242 listed here this week so
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  far. But yeah, she's 100, right?
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  A big reason we lost that leverage last week.
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  Obviously the board dump and didn't help, but contracts, if
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  you go back to last September and October when that board was
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  really 2:45 and we even spiked above 250 for a day, when when
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  you saw that happen, there was a lot of Packer contracts got
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  written. You know, guys were tired of the
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  margin calls, so they went to Packer contracts.
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  In the last two 3-4 years specifically, nobody was writing
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  Packer contracts because they were so darn bullish.
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  Now Fast forward to that price level at 2:50 and everybody's
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  got their hedge line of credit maxed out.
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  What are they going to do? If they want to hedge off some
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  cattle, they're going to go to pack contracts.
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  Here we are. You know, first the March
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  Packers need to burn up those cattle, use that as leverage
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  against us. They're going to sit out.
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  You know, last week specifically, a few of them that
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  had more contracts were out the week before.
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  I do expect them to come back into the market this week,
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  especially couple of your big boys, JBS and Tyson had a bunch
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  of contracts they're going to have to come back and buy this
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  week. I would like to imagine we're
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  going to see some improved cash trade by the end of the week
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  just because the board's put a little bit back on.
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  We'll see what it does today and tomorrow going into cash.
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  But inevitably they're going to be buying for the end of March,
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  you know that that the 4th week of March at this point.
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  So if we can get those contracts burned up, maybe we get our
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  leverage back. It's yeah.
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  And and to Samantha's point, given what the board did to the
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  fear cattle futures, it's it's surprising what figure still
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  brought in the barn. Make your big cattle are 5 to 10
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  softer overall. Your smaller cattle are staying
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  there just because it's grass season.
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  We see this every year, guys, you know, fighting over those
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  old crop calves, not wanting to get into those that fall, you
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  know, those flushy fall cabs. So yeah, it's just that time of
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  year. Yeah, for sure.
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  I think that that's kind of the key theme that we've been seeing
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  over the past few weeks. It's that time of year.
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  And I mean, if I had a dollar for every time we said that the
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  market was volatile and that it is all over the place over the
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  past year, I would be a richer woman than I am right now.
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  That's for none, sure. But it is just kind of the way
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  that this cattle market is going.
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  It is volatile. It is very reactive on what is
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  happening just in the world. It's very reactive what's
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  happening within our country, outside of our country.
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  News headlines, everything from a like plant and Greeley talking
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  about shutting down because of protests and striking and things
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  like that or whether it be just world events that are going on
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  or things like that are really we're seeing the effect on our
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  cattle market day in and day out.
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  And so, yeah, I kind of agree with you guys more on all of
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  those things as we continue to move forward.
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  What are our thoughts as we move into those spring months?
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  You know, there was a lot of meat contracts written I would
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  say a month ago and and that's optimistic.
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  You know, the retailers are optimistic for naturally for
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  grilling season. You never want to bet against
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  grilling season. So the Packers are going to need
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  inventory to fill those meat orders that they contracted.
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  So that's still optimistic. It'll be interesting how we come
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  into April and May to see what kind of contracts get written at
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  that time. You know, going further out into
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  June, July, August or more. So July, August, you hit those
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  dog days of summer and we lose some of that prime drilling
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  demand. Then we might lose some, excuse
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  me, some Packer interest again. But overall, it's, it's not a
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  train wreck of a market just because we had a little
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  softening here. You're in the middle of Lent
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  now, pretty seasonal. You know, normally you see boxes
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  actually slide back this time of year because of that, that Lent
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  time frame. But we're not seeing it as to
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  Samantha said kill cuts, you know, production is down so much
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  just because of those kill cuts. We can't.
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  The Packers are using that to improve their margins.
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  They don't want to kill more. I don't blame them when they're
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  losing 300 bucks a day. It's it's tough.
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  You know, if you're talking 10s of $1,000,000 a week, you know,
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  not even for the big boys, it's a big deal.
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  So I'm hoping boxes improve, maybe we stay here above 380 and
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  rally closer to 400 this summer. I'm a little bit concerned just
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  because I'm watching the retail and what's going on not only
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  there but also in the restaurant business.
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  It seems like that $2025 stake did some damage last year.
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  And I don't know that we're going to get the consumer
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  convinced they need to pay more than that.
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  So for me to be buying, buying yearlings, you know, with two
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  5260 break evens like we were doing a couple weeks ago,
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  that's, that's a big ask. So all things in I, I personally
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  think we're going to move past this Greeley strike and, and the
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  workers are going to go back to work.
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  Obviously, I'm just speculating like the next person on that.
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  But inevitably, I still don't think the Packers are going to
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  ramp up the kill like crazy. They don't have the margins,
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  they don't have the leverage, they don't have the consumer the
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  way they did the last two years. Demand is not a wreck, but it's
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  not the same it was two years ago or last year.
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  So it'll be interesting how that all plays out.
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  But demand has truly changed compared to last year, compared
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  to 2024. So like it or not, we got to
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  deal with it. Sure, Samantha, what are your
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  thoughts as we move into spring? Going into spring, I mean, I
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  think we're kind of hitting a transitional phase in where
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  cattle supplies are at right now.
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  A lot of people think that we're going to hit our tightest
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  supplies come spring and and I'm definitely in that category
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  where I think we could. But I'm surprised to see that
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  these sale barn receipts have actually held pretty strong.
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  And I thought they were going to tail off a little bit more the
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  last few weeks than they have, especially in this area.
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  I mean, we're still consignments are up to like 5000 head a week,
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  3005 thousand head a week. So that's still sitting pretty
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  good. When we look further into beef
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  demand and things like that, like Dan said, I mean it's not
• 11:44
  where it was in 2024-2025. It looked really, really strong.
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  I was actually just reading a deal yesterday.
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  It was a report from the Meat Institute and the Food Industry
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  Association. Meat sales reached an all time
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  high last year in 2025 at $112 billion.
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  So I mean that's major. They also did a study study and
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  it showed that 98% of the US households purchase meat and
• 12:08
  that 45% of shoppers say they're actively trying to prepare more
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  meat or more meals contained meat.
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  So yeah, that's a that's a major win.
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  I mean, beef demand's looking really, really strong.
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  Like Dan said, box beef cut out values are actually pretty high
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  this for this time of year and holding pretty steady.
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  I mean, we saw that major jump last week.
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  So I think in terms of the cattle market, we we could keep
• 12:32
  climbing. We could go the other direction.
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  I don't know, I've heard a lot of people talking like the
• 12:36
  cattle market might just keep going up.
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  I've heard equally the same amount of people who think we've
• 12:41
  hit our eyes for the year. So either could be true.
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  I think regardless what boat you're in, uncertainty still
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  definitely the the common denominator.
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  So that's where risk management becomes really, really
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  important. And, you know, if you're not
• 12:53
  sure where this thing's headed, like a lot of people aren't, you
• 12:56
  know, you have 100 calves and right now profits on the table,
• 12:59
  maybe that means you, you know, sticking LRP on and ladder
• 13:03
  coverage. Maybe you book 304050 head.
• 13:06
  Now hold off on the rest if that's what you want to do.
• 13:09
  I mean, that's the great thing about LRP.
• 13:10
  There's tons of flexibility. You're not that tied down to
• 13:13
  locking in those 40 to 50,000 LB contracts.
• 13:16
  So yeah. For sure, absolutely.
• 13:19
  I could not agree more. Well, is there anything else on
• 13:22
  the cattle market that we haven't hit on today that we
• 13:24
  need to? And if not, then Dan, can you
• 13:26
  head on at the green markets real quick for us?
• 13:30
  A lot of optimism in cow calf country, obviously also a lot of
• 13:34
  concern. Need some rain everywhere.
• 13:37
  And if we get those rains, I don't think that's going to
• 13:39
  soften these bread effort, bread, cows bowls, I mean
• 13:43
  anything you get any kind of rain through cow calf range
• 13:47
  land, I think those prices go even higher.
• 13:50
  Other than that, I mean, grains playing the big headline with
• 13:52
  Iran following oil up. I haven't even looked at oil.
• 13:56
  See what that did overnight? Yeah, it's it's trickling away.
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  So that's the old, the old deal. Not only buy the rumor, sell it
• 14:04
  back, but by the headline. And then we got to run out.
• 14:08
  It's just kind of softening a little bit.
• 14:10
  Use these, use these rallies to get hedges in place on new crop,
• 14:14
  corn, soybeans, wheat. We want to be optimistic.
• 14:17
  We want to be bullish. But it certainly doesn't feel
• 14:20
  like $100 oil market to me. And without $100 oil, I can't
• 14:25
  give $6 corn bullish or $15 beans.
• 14:28
  So inevitably we disrupted the supply chain of oil over in the
• 14:33
  Middle East for the time being. But it's not like the wells are
• 14:39
  running dry. I don't, I still don't think
• 14:42
  it's $100 oil market. I think we had our run,
• 14:45
  depending how long that last over in Iran is going to be
• 14:48
  probably the reason oil spikes high again or sells off.
• 14:55
  Trump didn't make the comment. We're running ahead of schedule
• 14:58
  over there, whatever that means. So we get a new leader in place
• 15:01
  over there and all the sudden, you know, maybe we back off and
• 15:05
  open open the shipping lanes. I think oil probably trickles
• 15:08
  back in the upper 60s, not good for grain markets again.
• 15:12
  So use these rallies, get some puts in place.
• 15:15
  You know, 450 puts are running like 2223 cents.
• 15:19
  That's cheap insurance. You know what the balance sheet
• 15:21
  the USDA give us, that's that's cheap insurance going into what
• 15:26
  could be another record crop. So yeah, equities, they're,
• 15:33
  they're not a wreck this morning.
• 15:34
  That's nice. It was a little bit concerning
• 15:35
  yesterday morning. But at the end of the day, war
• 15:38
  fears come, war fears go, and we all get to work and we all eat
• 15:42
  supper and life goes on. Yeah, definitely, definitely.
• 15:46
  Samantha, any other closing thoughts?
• 15:48
  Do you have anything else that we didn't hit on that you want
• 15:50
  to touch on? And just with Dan March
• 15:52
  mentioning the war and just outside markets, outside of the
• 15:55
  cattle market, looking at the stock market a little bit here,
• 15:58
  you know, I typically don't watch it too much.
• 16:00
  But now, you know, you go on every news outlet and they've
• 16:02
  got the Dow Jones down in the corner and they're showing what
• 16:05
  it's doing. And there's a lot of weakness in
• 16:07
  the stock market. Obviously, we're seeing that as
• 16:09
  a reflection of this war in the Middle East.
• 16:11
  You know, Monday actually wasn't surprisingly so bad, but there
• 16:14
  was huge drops on Tuesday. Historically, the cattle market
• 16:17
  has a tendency to follow the stock market.
• 16:19
  So you know, everyone's talking about about the war and if this
• 16:22
  is going to be successful or not, I have no doubt it will be
• 16:25
  the stock market will surge if it is.
• 16:27
  And you know, these short term setbacks are definitely going to
• 16:30
  be minored like might, like Dan said, I mean, we still go to
• 16:32
  work. It's it's going to pass and
• 16:35
  everything's going to be fine. But I think the short term
• 16:38
  uncertainty and that volatility again with the volatility might
• 16:42
  sting a little bit to begin with.
• 16:43
  Like I said, I was pretty pleasantly surprised that we've
• 16:46
  not seen the cattle markets take a bigger beating just yet.
• 16:50
  Knock on wood with the stock market down so much on Tuesday
• 16:53
  and the markets already so fragile to every little thing.
• 16:56
  But to that point, I mean, the CME cash feeder cattle index,
• 16:59
  it's still sitting so much higher than futures.
• 17:02
  So I think it's definitely a lot harder to rationalize that that
• 17:05
  drastically lower move right off the bat.
• 17:07
  I mean, it's not to say that it couldn't happen.
• 17:09
  Any commodity traded market is really rational.
• 17:13
  You know, certain certainty is definitely down to a minimum
• 17:16
  right now and the only market that likes uncertainty less than
• 17:19
  the cattle market is the stock market.
• 17:21
  So like I said, you know the two things, those tend to go hand in
• 17:24
  hand. So definitely be keeping risk
• 17:26
  management in mind and using it wisely.
• 17:29
  Absolutely. I couldn't have said it better,
• 17:31
  you 2 It is an unfortunate reality that we live in, that
• 17:34
  war is a part of our lives. But as Americans, we have the
• 17:38
  blessing and the privilege to still We're still going to go to
• 17:41
  work. Cows still need bed.
• 17:42
  We're still going to go on and persevere throughout our lives.
• 17:45
  So keeping that beef demand up, keep people at those counters
• 17:49
  pushing for beef. And I hope that we continue to
• 17:51
  see a positive spring as we go in.
• 17:54
  And like Samantha said, if we do feel a little bit of hurt here
• 17:57
  in the beginning, it will just be temporary for the most part.
• 18:01
  And so really hoping that we can continue to persevere through
• 18:03
  that. And like Samantha and Dan both
• 18:05
  said, really looking at those risk management tools and
• 18:08
  everything that you can do for you and your operation to
• 18:11
  protect yourself as we go throughout this volatile market
• 18:15
  that you all know down in the show notes, there's going to be
• 18:18
  links where you can get a hold of Dan, Samantha, or anyone else
• 18:21
  on our team to talk about what works for you and your
• 18:23
  operation, whether it be grains, cattle, anything else in between
• 18:27
  on what you can protect for the upcoming year.
• 18:31
  Dan, Samantha, as always, thank you for your time today.
• 18:33
  And to all of our listeners. We will see you all next time on
• 18:36
  another episode of the Cattle USA Daily Podcast.
• 18:38
  Have a good one y'all.