Cattle Outlook
Ron Plain and Scott Brown
University of Missouri
Domestic meat demand has been above the year-ago level for 21 of the last 22 months and there are signs it will continue to strengthen. Today's jobs report said non-farm payroll increased by 248,000 during September. That's the biggest increase since June and is an indication of stronger economic growth.
The U.S. dollar has strengthened against foreign currency for 12 consecutive weeks. That is good news for importers, but bad news for U.S. exports.
There were almost no USDA market reports issued during early October last year due to budgetary issues, so year-over-year price comparisons are not available.
Boxed beef cutout value was a bit higher this week. The cutout value for choice carcasses this morning was $239.03/cwt, up 84 cents from last Friday. The select cutout was $226.80/cwt on today's morning report, up $1.36 for the week. The choice-select price spread has been above $10/cwt each week since mid August.
Fed cattle prices rose this week on very light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $159.98/cwt, up $6.86 from last week's average. The 5 area average dressed price for steers gained $10.00 this week to $252.00/cwt.
This week's cattle slaughter totaled 582 thousand head, up 1.7% from the week before, but 8.9% lower than the same week last year. This was the 31st consecutive week that cattle slaughter has been below the year-earlier level.
The average dressed weight for steers slaughtered the week ending September 20 was 887 pounds, down 2 pounds from the week before, but 19 pounds heavier than the same week last year. This was the 14th consecutive week with weights above year-ago.
Year-to-date cattle slaughter is down 7.1%, but beef production is down only 6.1% due to heavier weights.
Feeder cattle prices were mostly steady to $6 higher this week at Oklahoma City. This week's price ranges for medium and large frame #1 steers by weight group were: 400-450# $285-$323, 450-500# $271-$288, 500-550# $262-$277, 550-600# $243-$270, 600-650# $223.50-$262, 650-700# $225.50-$258, 700-750# $219-$249.50, 750-800# $220-$244, 800-900# $213.50-$236, and 900-1000# $209-$212.50/cwt.
It was a good week for cattle futures. The October live cattle futures contract closed at $162.40/cwt today, up $3.96 on the week. December fed cattle settled at $165.87/cwt, up $3.77 for the week. The February contract ended the week at $165.55/cwt.
The October feeder cattle contract gained $7.77 this week to end at $240.87/cwt. November feeders closed at $240.97/cwt, up $9.37 for the week. The January feeder cattle contract ended the week at $234.72/cwt.