Ron Plain: Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU
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U.S. beef exports totaled 186.9 million pounds during March. That was 0.9% more than a year ago. There were large increases in beef exports to South Korea, Mexico and Japan, but declines in shipments to Philippines and Canada. Foreign demand for U.S. beef was down 13.2% in 2015 and has been down in two of the first three months of 2016. The strong U.S. dollar continues to be a obstacle to U.S. exports.

March beef imports equaled 273.8 million pounds, down 15.8% from a year ago. Beef imports from most major suppliers were down except for Canada and Mexico. Exports equaled 8.9% of March beef production while imports equaled 13.1% of production.

Live cattle imports totaled 234,370 head during March with 139,736 head coming from Mexico and 94,634 imported from Canada. March cattle imports were up 0.1% from a year ago.

USDA's weekly Crop Progress report says only 10% of U.S. pastures were in poor or very poor condition at the start of May. That compares to 13% on May 1, 2015.

Both beef cutout values and fed cattle prices are sharply lower this week. This morning the choice boxed beef cutout value was $203.66/cwt, down $8.39 from the previous Friday and down $54.54 from a year ago. The select carcass cutout this morning was $194.91/cwt, down $8.26 from last week and down $51.89 from a year ago.

Fed cattle prices were lower this week in very light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $118.03/cwt, down $5.84 from last week's average and down $41.74 from a year ago. The 5-area dressed steer price averaged $189.98/cwt, down $4.52 from the week before and down $65.06 from a year ago.

This week's cattle slaughter totaled 590,000 head, unchanged from last week and up 4.2% from a year ago. The average steer dressed weight for the week ending on April 23 was 870 pounds, down 8 pounds from the week before, but up 4 pounds from a year ago. This was the 97th consecutive week with steer weights above the year-ago level.

Prices for feeder and stocker cattle this week at the Oklahoma City Stockyards were steady to weak in light volume compared to last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $183-$192, 450-500# $180, 500-550# $178-$184, 550-600# $165-$177, 600-650# $144-$171, 650-700# $158.50-$161.25, 700-750# $144-$151.50, 750-800# $137.75-$143.75, 800-900# $128-$143 and 900-1000# $120.75-$131/cwt.

Today, the June live cattle futures contract settled at $120.725/cwt, up $5.805 for the week. August fed cattle settled at $117.90/cwt, up $5.48 from the previous Friday. The October contract ended the week at $117.375/cwt.

May feeder cattle ended the week at $147.375/cwt, up $6.955 from a week earlier. August futures gained $6.805 this week to close at $147.175/cwt. September settled at $146.05/cwt.

Source: AGEBB