Fat cattle market seeks its ceiling

The slaughter cattle market remains firm and well-supported, although the strong upward trend seen in recent weeks now seems to be giving way to a new equilibrium at current price levels.

“Some plants have reduced slaughter and are scheduling bookings further out,” noted one intermediary consulted on Tuesday afternoon. This is compounded by the intense cold and wind earlier in the week, which has worsened animal conditions. As a result, some plants have pushed bookings out to 8–10 days, while others are holding shorter windows of 5–7 days.

Steers are being paid between US$ 4.90 and US$ 5.00 per kilo carcass weight. As always, there are some premium deals for top-end steers —with relatively short transport distances and heavy carcasses— that can fetch several cents more, up to US$ 5.10, although this does not reflect the general market reference. Heifers are quoted around US$ 4.90, and cows range from a floor of US$ 4.65 to a ceiling of US$ 4.85.

Backed by firm international markets in the main destinations, packer interest remains strong at a time of year that, like every winter, is marked by lower supply. However, since last week, the industry's strategy appears to be to maintain demand levels in line with current reference prices, in an effort to prevent further increases.