Cattle futures plowed lower Monday on Friday’s Tyson new that it would shutter its packing plant in Lexington, Neb, and decrease production in its Amarillo, Texas plant.
Toward the close, Live Cattle futures were limit-down $7.25, except for an average of $6.99 lower in the back three contracts.
Feeder Cattle futures were limit-down $9.25.
Negotiated cash fed cattle trade was limited on light to moderate demand in the western Corn Belt through Monday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early FOB live trades at $208/cwt.
Elsewhere, trade was inactive on light demand.
Last week, FOB live prices were $4 lower in the Texas Panhandle at $224/cwt., $4-$6 lower in Kansas at $222-$224, mostly $7 lower in Nebraska at mainly $218 and $7-$9 lower in the western Corn Belt at $215-$218. Dressed delivered prices were $10 lower in Nebraska at $340-$345 and mostly $3-$10 lower in the western Corn Belt at $340-$347.
The five-area direct weighted average FOB live fed steer price last week was $7.65 lower at $217.41. The weighted average dressed delivered fed steer price was $7.58 lower at $343.36.
Choice boxed beef cutout value was 99¢ lower Monday afternoon at $370.49/cwt. Select was $1.47 lower at $355.51.
Estimated total cattle slaughter last week of 585,000 head was 9,000 head more than the previous week, but 50,000 head fewer (-7.9%) than the same week last year. Year-to-date estimated total cattle slaughter of 26.2 million head was 2 million head fewer (-7.1%) than the same time last year. Year-to-date estimated beef production of 22.9 billion pounds was 1 billion pounds less (-4.4%).
Grain and Soybean futures were mixed Friday.
Grain and Soybean futures were mixed to lower Monday in lackadaisical holiday trade.
Toward the close and through Jly contracts, Corn futures were 1¢ lower to fractionally higher. KC HRW Wheat futures were 3¢ to 4¢ lower. Soybean futures were 2¢ to 4¢ lower.
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Major U.S. financial indices extended gains on Monday, led by tech stocks.
The Dow Jones Industrial Average closed 202 points higher. The S&P 500 closed 102 points higher. The NASDAQ was up 598 points.
Though mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 86¢ to 98¢ higher through the front six contracts.
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Tyson’s announced closure of its plant in Lexington, Neb., and shifting to a single shift at its plant in Amarillo, Texas will reduce industry slaughter capacity by roughly 7,000 to 8,000 head per day, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
“The exact impact will depend on forthcoming details, especially how Tyson will manage a one-shift plant,” Peel explains, in his weekly market comments. “Depending on the details, the reduction represents roughly 7.5% to 9.0% of total industry slaughter capacity.”
Even so, Peel says excess packing capacity will continue for the forseeable future.
“Tyson’s planned reduction in packing capacity may be nearly (but not quite) enough to balance the decrease in cattle slaughter since the peak in 2022. However, fed slaughter is expected to continue decreasing in 2026 and 2027,” Peel says.