The cattle market continues to push into uncharted territory with cash prices climbing to new records. Brad Kooima of Kooima Kooima Varilek Trading joined this week’s Cattle Call to break down the bullish trends in both futures and cash.

“We've had an unprecedented, incredible run here, both in futures and in cash,” said Kooima. “Especially when you think about it in terms of a market that is already at all-time highs, and then to go running at it like we've done it here in the last two weeks.”

Last week, cash cattle in the North traded between $215 to $218, with a few lots touching $219, while the South largely held at $213. Kooima noted early bids this week at $220 and even dressed sales at $350 in Iowa, which “has got to be a psychological level.”

Kooima attributes the run-up to leverage stemming from currentness in the Northern supply. “The North, we're very, very current. I still believe that we're maybe pulled ahead 30 days compared to what we normally would be,” he explained. “We’ve got a very, very mild winter. That’s helped pull cattle forward. The cattle make lots of money here. We are anxious to sell, and that sets you up in a nice current leveraged kind of a market.”

Boxed beef has also rallied, which Kooima said is “somewhat seasonal,” but also driven by lighter slaughter volumes. “I'd say just about every packer has been doing some form of kill cuts or slower hours,” he said. “That’s a characteristic of when there’s not enough cattle. When there’s not enough cattle to go around, they slow it down.”

Slaughter pace remains a concern. Last week’s kill came in at 555,000 head.

While he cautioned that “one week doesn't necessarily throw all the caution flags up,” he said weights remain “stubbornly high” and warned producers against adding weight under the assumption that prices are invincible.

“There's some risk here that we may decide that, you know, hey, we're bulletproof. We're never going to go down. Let's just make the cattle bigger. I strongly recommend against that,” he said.

As grilling season approaches, Kooima pointed to rising demand for both premium cuts and lean ground beef. “Probably the biggest beef feature weekend of the year when they advertise the most is, interestingly enough, Mother’s Day,” he said. “Memorial Day… Father’s Day… there’s going to be a lot of weekends where beef is going to be a big feature.”

In response to a listener question on cull cow prices, Kooima said, “Cold-cow prices are very, very high. Anybody that’s living and breathing knows that, okay?” He noted the smallest cow herd since 1951 and record hamburger demand as key factors. “The ninety percent lean hamburger… is seventy or eighty cents a pound higher than a year ago and they're still selling it,” he said, adding that drought in the West could force further liquidation if rains don’t come.

Despite a midweek futures correction—one of the largest in weeks—Kooima isn’t concerned. “A fund manager gets paid partly on his performance. So if his fund is long, he's very incentives to take some profit right at the month end,” he explained. “I wouldn’t be too alarmed at a two-dollar sell-off after rallying almost twenty.”

Looking ahead, Kooima expects strong cash prices to persist. “I think $220 at a minimum in the north. I actually think there’s a chance it might even be a little bit better than that,” he said. “I don’t think there’s enough cattle to go around in the north and that ought to drive the bus for now.”

Contact the KKV Trading Team at kkvtrading.com or by calling (712) 722-0023.

Cattle Call is an original production of the Nebraska Rural Radio Association and is brought to you by Wolf Auto – Small Town Strong.