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

Cash cattle prices surged again last week, led by the northern market, where negotiated trade continues to outpace the South. Brad Kooima of Kooima Kooima & Varilek says the price spread between regions is directly tied to the way cattle are marketed.

“Once again, the cash market led by the North, led by the area of the country that actually does negotiate for the bulk of their cattle, and those two are intertwined in my opinion. That’s the reason why we carry a big premium to the South.”

Kooima says prices in the North climbed as high as $235 to $237 late last week, while the South finally edged higher, reaching $223 to $225. Despite expectations that southern sellers might hold out for higher prices, Kooima says the spread remains wide.

HOW MANY CATTLE?

Listener questions also sparked a broader conversation about the significance of the northern region in cattle feeding. Koima estimates around 28% of the nation’s fed cattle now come from the triangle of northwest Iowa, southeast South Dakota, and northeast Nebraska.

“Had you asked me this question, say, five or six years ago, I'd have said it's about 20% of the fed cattle in the United States. That has changed… Every report that we get will tell you the same thing.”

He says Iowa and Nebraska are showing year-over-year growth in feedlot numbers, while southern states like Texas and Kansas are seeing declines, possibly in part due to screwworm-related restrictions and longer-term drought effects.

WHEN DOES PRICE DESTROY DEMAND?

The conversation also turned to concerns about demand erosion, especially as beef prices climb to new highs. Kooima says consumer behavior has evolved since the pandemic, and that’s helping domestic beef demand hold strong.

“You trained a whole generation that, gee whiz, I can actually… I YouTubed a video and now I’m grilling my own steak. I can do this two times, maybe three times a week for what it used to cost us to go out on Saturday night.”

While Kooima acknowledges that tax bills and rising costs may influence marketing decisions, he encourages producers to stay focused on the opportunity in front of them.

“You got record high prices. You got probably record margins… I guess my theory is, let’s try to make as much money as we can here. How about that?”

MORE MARKET VOLATILITY

As for this week, volatility continues. For the second Tuesday in a row, false rumors jolted the futures market, this time over a possible plant closure. Kooima says producers and traders should be cautious about reacting to unverified news.

“When Cargill closed the Plainview plant in Texas many, many years ago, it was from out of the blue. Nobody knew about it until the news was let out… So is somebody going to have to close? Maybe someday. Yeah, probably. I don’t think it’s today.”

Kooima also criticized the recent expansion of daily futures limits by the CME and voiced opposition to proposed 24-hour trading, calling it “a horrible idea” for a market that doesn’t have the size or liquidity of grains.

Looking ahead, Kooima expects steady to higher cash trade this week: “Let’s go steady higher in the North and maybe two to three higher in the South, for a guess.”