Varileks Cattle Call    
4-26-24

It was the battle between bird flu and cash cattle last week yet again, and cash cattle took the victory.  The story of avian bird flu kept on giving with the interstate transportation rules with lactating dairy cattle.  There was a week of lull in the avian bird flu news, but it appeared to ramp up again.

Testing for the disease is new, so we do not know where we will all find a virus that is on the books since 1880.  My thought is, we will find it in many places.  Leftover dead fragments of the virus are found in milk though it is completely safe to drink.  If they are testing milk, they will test beef cattle and meat until they find it as well in my opinion.  The good thing is, we keep hearing about it and there is no threat to human consumption.  We may see the market become more immune to hearing about it.  Just know that avian bird flu is not going away with tests going to another level.

Cash cattle took the prize this week in feeders and fats.  Feeder cattle prices were stronger than the previous week with a significant jump in price in the north and south.  Live cattle bids started at $182 in the south and rose to $187 in the north by the end of Thursday. Some trade was renewed at $187 on Friday with packers short bought.

Peak demand is right around the corner, and it does not feel like packers have a large lineup of basis contracts to exploit the market in my opinion.  Producers hold the leverage even with large carcass weights on the diminishing yearling crop.  May will be the gap as we transition to new crop calves, so take advantage of a great basis with a hungry packer.  
Have a good week.

Scott Varilek,
Kooima Kooima Varilek Trading

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