Cattle Call: Too Much of a Good Thing? Prime Cattle Lose Premium Power

Added: 2026-05-28

[00:00:00]Welcome to Cattle Call, an original production of the Nebraska Rural Radio Association. I'm Chad Moyer. Cattle Call is brought to you by Blue Chip Herfords there at Oxford, Nebraska. Blue Chip, the Baldy Maker. Uh thanks to Tracy and Leslie again, Blue Chip Herfords [music] for sponsoring the Cattle Call program again here this week. Once again, it's Brad KMA Koma Koma and Varlick at Sous Iowa, breaking down the markets for this week. Uh a little bit calmer week here this week as we record this. Anyway, uh midday on on Wednesday. Uh we've had a couple of exciting weeks in a row. Uh we uh went out and celebrated Memorial Day weekend. Looked like move movement was pretty good uh at the retail level. But uh first of all, let's just kind of recap last week. Uh we had a Catalon feed report. Uh maybe let's start there.

[00:00:46]Anything stand out on the Catalon feed report in your mind?

[00:00:50]>> Um thanks for having me on Chad. Um I thought there was some interesting nuance to it. First of all, you got to start with the placement number because that's where we've been, right, Chad?

[00:00:59]For a year. Uh, you know, since uh uh the the full flow of what happens when the the the the border's been closed uh with imports from Mexico. So, we're I think we're 16 months deep into this now. So, we've had enough time that we're comparing to a very very very low placement number, you know. So, let's start there. So, the fact that we've got a little more placements than a year ago shouldn't be too alarming or surprising, but the guest was 104 and a half and it came in at about 106. Um, and then to break that down a little bit further, if you're curious, uh, Texas placements for the state of Texas was 108 or 8% up.

[00:01:36]Your fine state of Nebraska was 98.

[00:01:40]Uh, Iowa was 102, [clears throat] Kansas 105. and kind of this out the the outlier here for me this time was Colorado at 117%.

[00:01:51]So you've [clears throat] kind of got the um well more formula uh fed uh states area areas that typically don't do a lot of price discovery. Um there there's that's where there seems to be some increase in the cattle and I and I think that's relative to you know comparing to the low number. But there's a little bit of another story to it too, I think, Chad.

[00:02:11]And that is the drought. Um, which I think also [clears throat] uh increased placements some in April. Uh, cattle that I know from talking to customers out there in western Nebraska, Wyoming, uh, far western South Dakota, there's areas of Montana uh, that, you know, cattle were set up to go to grass uh, going to make years out of them and had to change their mind and sent them to town because they don't have enough grass. and the grass they do have they have to try to save for their beef cows and maybe a heer or two that they're trying to retain. So I would say that that influence was part of the story.

[00:02:46]Now this is as of May one. I would say that you looking forward that that influence is going to be even bigger when we get to the June one report that will reflect what happened during the month of May. That there's been a lot of that in May. um a lot more in May of this this drought forest uh uh placement of cattle early uh or moving of cattle early uh than they did in April. So that that's kind of the placement number. I thought that the marketings were a little bit interesting and a little bit telling too. Um marketings were poor. Um and I think that's a reflection of last week's weights. Stereer carcass weights were up seven pounds week on week. We've been talking about it forever. Holding action rally. Um, and that'll work until it doesn't. And um, so yeah, we're feeding them longer. We have less on feed. And, uh, didn't learn a lot new.

[00:03:34]We still don't have very many cattle on feed. Chad, it's just what we have is pretty big.

[00:03:39]>> Was this one of the reports where they break down the steer versus heer number, so it would give us an idea maybe on uh, heer retention or or not?

[00:03:48]>> Unfortunately, no. Um, um, but I can work through some numbers.

[00:03:53]Let's let's let's put that down as a potential question for next week. I and I'll I'll be better prepared to answer that question if that's okay.

[00:03:59]>> Sure. Absolutely. Um but as far as as long as we're talking about placements now, we did have a question come up.

[00:04:04]It's um you know, how long are these placements going to be an issue? Because it has been over a year since the um since the border was closed. Are are we past that where that placement number might be skewed or you know um uh outside what normally would be or or is this something that the tra have to watch for each month for quite a while?

[00:04:27]>> Yeah, I know I know what you're saying.

[00:04:28]You know, is is this the new normal that this is just it? You know, um [clears throat] I don't know of anybody that thinks that the border is going to stay closed forever. however, you know, so I, you know, I think that that still is that that wild card a little bit back there.

[00:04:44]Um, now this secretary of a seems to be um really dug in. Um, and I what happens if or when we get one in the United States? Do we say then, well, we got it anyway. Now we're going to open the border. Um, I don't want to be the deputy downer on the thing, but I mean legitimately if if they if it's 60 mi from the border the first time you have a tropical storm south wind, I mean I I frankly you wonder, you know, with feral animals and stuff like that, how long it can stay out. But to your [clears throat] question, I I I think the market the market's going to do its job and maybe has already or is already.

[00:05:24]Okay. You you look at the percentage of beef production. Obviously, we're making all these cattle bigger, so be productions less, but not with the maybe the drama of the the, you know, that that that that broad sweep that we did in 2025. That'll be different in 2026.

[00:05:39]Um, we're going to start to see more and more of the beef on dairy influencing, I think, both average weights and overall supply of cattle. Um, you can see that reflected in the cow slaughter. Uh, what's happening with the dairy cow herd versus the beef cow herd, they're going in opposite directions. Okay. um the the um the you you got to kind of I know everybody wants me to be bullish and I'm bullish today fine for for if they're here and now there's enough GA around but you're getting some of these tells right or some of these yellow flags of uh okay that you know when I start to hear people tell me that well it's it's it's just going to stay good. I mean they're just it's just going to stay good forever. I'm going like yeah well I'm 68 years old. Good luck with that attitude. I I mean I sounds good to me, but I doubt it.

[00:06:24]>> Sure. All right. Something else I was going to bring up about last week, and that is uh I pulled the the negotiated uh report from last week. I noticed uh only what just under 50,000 in the cash market last week, and it was a 5050 split from upfront delivery to deferred.

[00:06:42]That isn't normal, is it?

[00:06:45]>> Bravo, Chad. I mean, you're just about as nerdy with these numbers as I am. I uh >> careful what you for Brad. [laughter] >> No, good good catch and and and and significant. And coincidentally, the market was $5 lower. How about that?

[00:07:00]When we don't hardly negotiate any cattle, right? I mean, thanks for the setup there. Even I can spike that one over the net. Yeah, it was it was it was interesting to me, too. And I'm glad you brought it up. 28,768 in the 15 to30 slot. A little more than what it had been for a while, right? you know, so you wonder and and you hear the stories of some of the the the the big four that's bought cattle I know for the third week of June, you know. Uh so, you know, that that would fit into that uh slot. And yeah, I I don't know, you know, I I I worry when whenever you you you take that number down. 4,100 in Texas, that's how many they negotiated for some ridiculous thing like that, you know? I mean, um, and I guess that's reflective of the lower market in my opinion. But maybe this week, although I doubt it just because I think that people have enough long bought cattle, it is the old saying would be for a short for a long, we do have a 4 day business week for a fiveday kill week.

[00:07:57]Often that used to have the market a little bit higher. Um, nice to see the boxes bounce here a little bit, but not really reflective exactly either of a real robust.

[00:08:08]Um, I heard you mention in passing the weekend clearance. It was >> decent in re in some spots. Um, where I was, you just about had to beat each other over the head to get to the meat case, you know, up in northwest Iowa, but I guess we kind of like our ribe eyes no matter what they cost. Um, but so no, I I think you make a good point and and the the reflecting of the lower of the lower negotiated trade is always interesting to me and that it ties back to that comment I made about Colorado.

[00:08:35]I'm trying to be sensitive kind of, but I mean that is a formula state, you know. So, I mean, if they're going to start to rebuild their supply there, that might change the dynamics of how how much that that those corresponding packers have to participate in the cash market. You follow? I mean, if they increase the the number of turning cattle, we'll see.

[00:08:53]>> Okay. Well, and something else somewhat related to the you uh to this uh I wanted to ask because I noticed it too.

[00:08:59]I can't remember if it was last week or the week before, but here in the north, it felt like there were more negotiated cattle that was done so on a on a live basis. Um, and we're known to be the dress, you know, we're usually a dress business up here. Does that indicate a a change of some kind?

[00:09:18]>> Well, of course, I'm always one of those kind of like um you can't handle the truth, right? I mean, kind of a I think it's reflective of how high yielding these cattle have become. And so, all of a sudden, the packer goes like, "Okay, I'll buy your cattle live because they know just how high yielding these cattle have gotten." Uh there's some products on the market that people are finding out that, you know, really, really do improve. And so, you're getting some of these long fed calves and they tell me, "I can get a calf to yield 65%." I I don't use the I I don't but I mean that's what I'm being told.

[00:09:54]Um and so I think you know the the packer goes away from and he does what's best for him. Um and and uh I sell my cattle alive too because in the long run I think that that's maybe still the best for me. Um but uh I think it's reflective of of their seeing just and on on that line you notice what the grade has been. I mean this prime is getting to be to the point where it's like not even unusual anymore. I mean, everything's choice.

[00:10:20]And a whole chunk of this stuff is prime.

[00:10:24]>> I am starting to see these premiums go away on these grid bids where they hardly pay a premium for for prime anymore because they got so much of it, they don't have to. It's like, well, it's, you know, I mean, this and that's because of days on feed.

[00:10:35]>> Yeah. It's kind of come to be expected now, right? The the uh carcasses are so good, we're going to get this, right?

[00:10:41]>> Well said. Reminds me of, of course, I'm old, right? I went through the hog crash. Uh, used to have 200 hog customers. They got four now or something like that because it got completely integrated, right? You know, but so back then they had this, okay, this is what your standard your yield is on a hog. Okay? And that's what we'll make our deal for. Well, then everybody's hogs were way better than that. And they go like, okay, you don't get a deal anymore. That's just the way it is. We're just going to keep raising the raising the bar, raising the bar, raising the bar so that we don't pay any premiums anymore. So anyway, hate to be the naysayer, but let let's not let that happen to our industry here on this next break that we get sometime and when we and we will sometime.

[00:11:16]>> Yeah. Huh. Very interesting. We'll have to cover that more down the road when we have more time. I did want to get to a a pretty interesting question that we did get from one of our viewers, one of our uh listeners over the last week. And this one kind of goes back to u uh back in 2014. The listener says 2014, but this is thinking after that 15 and 16.

[00:11:37]Um uh every calf uh every cow calf producers's mind thinking of that time.

[00:11:43]uh how can they bring themselves the nerve to expand uh with the prices where they're at right now? Is there any true protection to what's available and maybe take some of that risk off the table to encourage them to to do something and uh and move forward?

[00:12:02]>> I hope we're going to answer this question. I I I think we know where what this what what he's what he's trying to what this person is trying to find out about because that's the same thing that I'm trying to, you know, uh from a long-term standpoint trying to get my head wrapped around as well. Okay. So, I mean, yes, 2014 was the bull market of my career.

[00:12:22]Uh it wasn't until third week of May of 2015. I can show you my scar. Third week of May of 2015 till December 2016, not a single positive close out without some hedge money. Okay? Okay. And you never have enough head. At least I don't. Um, so that was a stretch there where cattle lost a lot of money. Okay. Um, so it was the it was the backside of 14. I'm sure that that that's what this person's asking about. Um, and and couple of comments I wrote down because I I thought this was a thoughtful question. I'm trying to give it a thoughtful answer with a little bit of humor. Okay. Sorry. Um, first of all, you know, how do they bring themselves to have the guts to do it? That part of the question. Um, you'd be surprised how short memory some of the people I talked to have. Um, you'd be surprised at people started after that deal. Um, I was at a I did a a seminar couple of months ago and I had a young guy come up to me. I've never lost money feeding cattle, you know. Okay.

[00:13:19]Um, if you quit now, you'd be the one of one. Uh, that has never, you know, uh, kidding. But I want everybody to make money. Me included. But, uh, you know, you'd be surprised. Okay. How how quickly we forget, right? Um [snorts] the other factor then I always think that this has something to do still with trading and that's fear and greed, right? Um and and let's you know let's lean on the greed part, you know, I mean these guys and welldeserved uh the cow calf guys making money. Okay.

[00:13:50]And so does the greed factor kick in?

[00:13:52]does the initiative. Uh not every 25 year old person is lazy like some people would like to tell you is there's a lot of people that want to go out there and get after it and get it and make money and and and so you know there's going to be a component of people that do this. Okay. So, uh it and let me go on here to some boring numbers and I'll be quick. Okay. We've taken this beef cow herd down to a to a skeleton level. Hard numbers. Okay.

[00:14:20]2.344 million cattle 2025. That was the slaughter. 2.344. That's how many beef cows slaughtered. 24 2.834.

[00:14:32]23 3.516.

[00:14:35]22 3.946.

[00:14:38]That's how many we slaughtered then compared to now. We're not killing very many beef cows at all now. That's my point. 17.3% less than a year ago.

[00:14:46]Okay. So, What are you going to do here? What what what's happening to this guy? Is he gonna clearly he's going to keep that gal as long as he possibly can? The days are gone of of of calling the cow that looked crosswise at you or had a little bit of a bad foot or had a bad udder or whatever. You know, where you I I geez, I'm going to get a hundred thousand bucks for this load of cows I'm selling.

[00:15:13]You know, call them. I don't like that one. She always wants to, you know, she's a mean one or blah blah blah.

[00:15:18]Okay, that th those days are over, you know, in my opinion. Now you've got this skeleton level of supply that you're going to try to can you rebuild that herd with just those cows. I don't know.

[00:15:28]I No, but it's a start, I think, and then you go into this whole retention thing. Um, one last comment, the female slaughter, which would be the heer and the beef cow slaughter, 9% less in 25 than in 24. So to me, you're getting some hints that yes, there is somebody has the nerve already a little bit. Um, now is that uh bearish today and no, it's actually a little friendly today if we're actually holding a few heers, which I believe we are. Okay, but [clears throat] um the true protection part of this plan, no. You can buy some put options.

[00:16:05]I would suggest it. Absolutely. Look into the LRP. We sell it here, too. Um, does it eliminate risk? Not even close.

[00:16:13]Uh, I mean, you know, I mean, it it it's something, but I'm unfortunately it comes down to that the the the thing I've learned through all this experience is that risk is proportioned to gain.

[00:16:24]Okay? You know, so if you want to have no risk, you have very little chance at gain and vice versa. Uh, not to be weird about it, but u there'll be people that have the guts to do it if they have the feed. And that's the whole regional problem with with parts of the western Nebraska, etc. >> Sure. All right. Appreciate that insight. Good stuff. All right. Uh before we wrap up, we need to talk about Okay. What does this week hold? Like I I said at the beginning, it it's a holiday week, so we didn't really get started till thinking about this until Tuesday.

[00:16:52]But uh thoughts on, uh the CA cash trade for this week. Are we going to bounce back, have a a higher number sold this week? What what do you think uh as we sit today? What's uh the feeling of the cards on the on the deck right now?

[00:17:06]>> I don't like to be wishy-washy because usually I'm dumb enough to have an opinion even when it's wrong. But I'm really It's [clears throat] feels like a coin flip to me. I with the updated day, I would think that would maybe help the feed lot have a little more resolve, right? Um um I came into the week thinking steady 260. Um, and now I'm I don't know. You know, I I guess if if we were going to if we were going to bet a beer on it, I'd say let's go with two higher at 262. Um, final answer. And I hope I'm right, but I'm not super confident. [laughter] >> And I'm not going to let you get off that easy. So, give me a reason. What could support it, but give me a uh the other side what what's at play that might hold it down.

[00:17:53]>> Fair. What might hold it down is the basis traders. Okay. Um and and those, you know, the guys in the south that brag that they're always hedged, good for them. Um you know, when you got a futures at 251 here on June, they're going to be easier traders because the basis is so good for him. So that's maybe the the pull down. Um the [clears throat] other thing is is with average weights, they are you always wonder about, you know, the guy that's, you know, he's he's going like, well, I'm waiting every week because it goes up every week until it doesn't go up every week. And then that guy's going, "You know what? Maybe I better get rid of these 1790lb steers after all." So that might be another side of it. Now the the the why it will go higher, why it might go higher. We still don't have enough cattle to go around. You still got major packers that I think need cattle. Uh you you you you've lost a plan in Lexington. You've got one on strike in Fort Morgan. It hasn't changed the leverage at all. I mean, it's been amazing, you know. So, um I think if one or two bl these packers blink, I I I think you could very easily um um you know, see the market get a little bit better and the the feed lot's got some guts now.

[00:18:57]They these guys have waited and waited.

[00:18:59]I I they haven't they've been paid and rewarded by doing it. So, I got a feeling they try to hold out a little bit this week and we'll see if we can't get a little better prices.

[00:19:07]>> All right.

[00:19:08]>> Hey, that's good. I like that. A little a little different format. We'll put the options out there. You pick which one you want in the that too.

[00:19:14]>> Yeah. In the meantime, if folks would like to reach out, talk about what's going on in the cattle business these days, certainly open to do that, right Brad?

[00:19:21]>> Oh, we would welcome that actually. Uh kvtrading.com is the website, but we'd rather have you call me or one of the other three guys here. Uh 712-7220023.

[00:19:32]>> All right. Very good, Brad. I appreciate the insights. Thank you so much uh for taking the time and joining us again this week. That's Brad Kimma. Kimma Kimma and Varlick at Sousenter Iowa. And again, we've had great comments, great interactions here over the last few weeks. Be sure and put your comments in there, ask a couple of questions. Uh we'll come back and talk about it on Cattle Call. Again, thanks to Blue Chip Herfords for sponsoring the Cattle Call podcast again this [music] week. Uh Blue Chip, the Baldy Makers, again, the McGee there at Oxford. Thanks again for joining us here this week. And thank you for joining us as well here on Cattle Call. Hit that subscribe button and we'll see you on next week's Cattle Call program. Have a great week.