The cattle market had a great 2024, but Scott Varilek of KKV Trading in Iowa says January typically isn’t the best month to market cattle.
“That’s always my least favorite month to sell cattle. It feels like we usually advertise some packers’ kill cuts. They do some of their cooler cleanouts or maintenance, so we usually see those seasonally happen. So, when that starts to be talked about by packers, it’s not a surprise, and they like to overplay that, stand up on a mountain, and preach it. But I would expect some of that to come based on our tighter supply, and it’s a way to back up cattle for them. We just get past our big demand season and some of that excellent shelf business that we get there, so I would expect that we kind of lull just a little bit because we always feel like, ‘Hey, spring’s coming, let’s get that spring demand kind of kicking in,’ and it’s just too early.”
He says cash markets were particularly strong in December.
“Cash prices have been what’s leading us here and let us out of the gutter this last break that we had. You know, even on Saturday, they were out looking for cattle. There was $197 trading, some $197.50 to some regionals, and some guys were even able to pass that bid because we’re current enough, and it just feels different. If you look back for years, producers have not had this kind of leverage in a long time, and we have it. We’ve got all packers bidding. We’re able to pass, we’re able to take bids and choose where we’re going. We’ve got people getting live bids that never get live bids in some of those remote areas, so it feels like we have the upper hand on the live cattle cash side.”
Varilek thinks that leverage will stay on the producers’ side into early 2025.
“I see a lot of confidence, especially in this cash feeder market. I mean, these prices, there was about a five or six-week stretch that they just went straight up. I feel like we saw, maybe, some heifers getting held back earlier in this Fall, and then, as we’ve just climbed fast, it’s getting tougher to tougher to think, ‘Are we going to be able to rebuild this cowherd or not just with the sheer cost that it is?’ I mean, it’s like $2,000 heifer calf, and it’s going to cost, you know, my cowboy math says about $1,000 per year on that animal.”