Ron Plain : Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU

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Calculations by the Livestock Marketing Information Center put cattle feeding losses at $152 per head for closeouts during July. That made July losses the biggest for any month since February.

This week fed cattle prices were lower in heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $109.92/cwt, down $4.89 from last week's average and down $31.28 from a year ago. The 5-area dressed steer price averaged $174.03/cwt, down $6.35 from the week before and down $48.09 from a year ago. This week's fed cattle prices are the lowest since the last week of July 2011.

The lower cattle prices are boosting female slaughter. For the six weeks ending on August 20, steer slaughter was up 8%, but heifer slaughter was up 12% and beef cow slaughter was up 29% compared to a year ago.

Beef cutout value also was lower this week. This morning, the choice boxed beef cutout value was $192.10/cwt, down $7.63 from the previous Friday, and down $48.53 from this week last year. The select carcass cutout this morning was $187.92/cwt, down $6.11 cents from last week.

This week's cattle slaughter totaled 604,000 head, down 1,000 head or 0.2% from last week, but up 7.9% from a year ago. Year-to-date cattle slaughter is up 4.3%. Because of heavier slaughter weights year-to-date beef production is up 4.7%.

The average steer dressed weight for the week ending on August 20 was 893 pounds, up 6 pounds from the week before, down 12 pounds from a year ago, and below the year-ago level for the 16th week in a row.

USDA's weekly crop progress report said that 16% of U.S. pastures were in poor or very poor condition on August 28. That is down 2 points from the week before and also down 2 points from a year ago.

Feeder cattle and stocker cattle prices were $5 to $10 lower this week at Oklahoma City. Prices for medium and large frame #1 steers by weight group were: 400-450# $150-$180, 450-500# $153.50-$161, 500-550# $143-$162, 550-600# $136-$159, 600-650# $130-$147, 650-700# $128-$147, 700-750# $130-$144, 750-800# $132.50-$140.50, 800-900# $128-$141.50 and 900-1000# $123.75-$128.10/cwt.

Cattle futures were lower this week. The October live cattle futures contract settled at $101.60/cwt today, down $4.75 for the week. December fed cattle settled at $103.47/cwt, down $4.63 from the previous Friday. February fed cattle futures settled at $104.25/cwt.

September feeder cattle futures ended the week at $134.87/cwt, down $5.05 from a week earlier. October feeder cattle lost $3.88 this week to settle at $132.07/cwt. November feeder cattle futures closed the week at $129.67/cwt. down $3.15 from the previous Friday.

Source: AGEBB