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The cash cattle market delivered another surprise last week, with prices in the South jumping sharply and narrowing the long-standing gap with the North. Brad Kooima, of Kooima Kooima & Varilek in Sioux Center, Iowa, joined this week’s Cattle Call to break it all down.

This week's topics: ICE activity in Nebraska, cash trade momentum, and herd expansion hesitancy.

🐮 ICE Activity Hits Nebraska Workforce

In a development making national headlines, ICE raids have targeted communities with large meatpacking workforces, including several in Nebraska.

“They were all over Nebraska - I understand Schuyler, Grand Island, Omaha,” Kooima said on Wednesday. “Now, I need to clarify: to my knowledge, none of them have been in a packing plant.”

Still, absenteeism is already showing. “I was told that 25%… may be approximately 25% absenteeism this morning,” Kooima said. Two small plants reportedly didn’t kill at all due to worker shortages.

While he hopes the situation de-escalates like it did in the past, it’s another wild card in an already volatile market. “It’s just weird,” he added. “Three Tuesdays in a row where we got to deal with something, right? You know, screwworm, plant closing, and now the ICE raids.”

🐮 Cash Cattle Surge... Again

Trade in northwest Iowa was mostly at $242, with some reports of $243. Meanwhile, Southern trade surged from midweek on.

This week, Southern prices climbed again. “There’s already trade instances at $238, $239 and even just a handful of cattle at $240, which would be another three, four, five higher than last week,” Kooima said. “It certainly feels like we’ve got an encouraging feel to the cash market.”

🐮 Expansion Incentives Clash with Feed and Drought Concerns

Asked about whether current prices are enough to encourage cow-calf producers to expand, Kooima said it’s more complex than price signals alone.

“One of the roles in the market is to go to a price high enough to encourage production and probably to discourage consumption,” he said. “Now as you relate that into the cattle thing, that’s what to me is kind of fascinating.”

While profitability helps, expansion depends on moisture and mindset.

“Maybe more important than economics is grass,” Kooima said. “Is it raining enough that you dare to go ahead and turn out cattle?”

Some recent rain has helped in northern areas, but retention is still modest. “We’ve got roughly 37 percent heifers to steers. A year ago, we had 38.2,” Kooima noted. “Slight retention, very regional... otherwise, the incentive to sell a $2,400 heifer calf is pretty real.”

🐮 Demand Still Solid, But Supply Is the Driver Now

In 2023, the cattle market’s strength came mostly from demand. That’s changing.

“The 2024 rally - was it supply? No, it was not. It was demand,” Kooima explained. “Now we’re coming into [a rally] because the supply is so tight.”

Fed cattle slaughter is down nearly 5% year to date. “Now we’ve got into the tight supply,” Kooima said. “Last year, I would say largely demand. This year… the supply is so tight.”

And while home grilling habits developed during COVID have maintained beef’s popularity, packers aren't turning profits.

“If demand was really good, you’d have a packer that’s making money,” Kooima said. “He doesn’t have margin here.”

🐮 Looking Ahead

With Southern cash gaining and northern supply tight, all eyes are on how the market balances this week.

“If we stay that big premium, that means we could be testing $245,” Kooima said. “That’s another week where we get closer to convergence, and the June cattle still look undervalued.”

“As the North goes, so will the market,” he added. “In the short term, the market feels like it’s in good hands here, particularly the cash.”