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

The cattle market continues to ride a wave of volatility as cash prices remain historically high, even while futures markets show signs of weakness and uncertainty continues to swirl around geopolitical tensions and recent enforcement activity.

Joe Kooima of Kooima, Kooima & Varilek in Sioux Center, Iowa, joined this week's Cattle Call to break it all down, noting that the price spread between the North and South narrowed last week, but not enough to change the fundamental outlook.

CAN CASH TRADE KEEP ITS MOMENTUM?

"We did see a little bit of a… I’m not really going to call it a slip necessarily, but yeah, $235 in the country in the South, some $238 here and there on some of those video ones," said Kooima. "But yeah, the North I would call it just a touch weaker."

Kooima says limited trade volume in the North remains a feature of the market.

"We’re still very current up here, the availability is slim, but we did have some $240 cash happen last week," he said. “So have a little bit of a slip with that, and when we talk about the leverage, it's always a superbly fine line.”

On Monday, markets rebounded somewhat after a tough finish the week before, but global uncertainty and news like recent ICE activity quickly reversed gains.

“We took some of that uncertainty away from the prior week about some of those ICE raids happening, and the market bounced quite nice… but then we have the uncertainty of the geopolitical stuff that stabbed us pretty hard yesterday,” Kooima said on Wednesday.

Despite the uncertain tone, some cash trade is already being reported this week.

“We’re maybe hearing of some steady stuff a little bit yesterday, some $235 in Kansas, but we’re also hearing some $235 in Nebraska for a couple of weeks out,” he said. “Once again, that’s a huge price to have.”

Kooima noted the lack of forward contracting activity and deferred delivery, a sign of both tight cattle supplies and psychology in the marketplace.

CASH VS. FUTURES

A viewer-submitted question also brought attention to the steep discount between cash and futures markets, raising concerns about long-term strategy and risk.

“With next April at $212 and the cash $30 above that… well now I’m looking at a screen where April cattle [are] at $208. So it’s still a big discount there,” Kooima said. “The risk is very large in this environment, especially with all the amount of money spent on these critters right now.”

Another common frustration for producers: why high cattle prices don’t always translate to higher meat prices in stores.

“We kind of look at it as a… let’s view it as a pie chart. And that pie chart is labeled margins,” said Kooima. “The leverage is in the producer’s hand right now. So we are taking the big part of that margin.”

UNCERTAINTY AHEAD?

As the week progresses, uncertainty remains the dominant theme.

“It looks just softer, just generally softer,” he said. “We have a marketplace that is up one day and down the next. But we’re in a little bit of a mini downtrend here, unfortunately.”

“The fundamentals are there, but unfortunately, they’re just kind of in the backseat with this money flow going on,” he added.

Still, staying disciplined and current is top of mind for many.

“Take what you can do, move cattle, and just keep that program going on,” Kooima advised. “Because the moment we start saying, no, I don’t want to sell at that cash price and the next week it drops lower… then all of a sudden you kind of get a little bit of a backlog.”