By Dr. Andrew Griffith
FED CATTLE
Fed cattle steady to $1 lower on a live basis compared to last week. Prices on a live basis were mainly $217 to $218 while dressed prices were mainly $343 to $346.
The 5-area weighted average prices through Thursday were $217.91 live, down $0.74 from last week and $345.23 dressed, down $0.07 from last week. A year ago, prices were $242.59 live and $382.75 dressed.
Cattle feeders were probably fairly tickled to receive somewhat steady money this week as finished cattle price erosion has been swift and deep. The quick decline in output prices and increasing price of corn has put the squeeze on cattle feeders with their only form of recourse being what they pay for feeder cattle. Despite producers holding on to feeder cattle with the hope of a higher price, those cattle will make their way to feedlots sooner rather than later with either new ownership or placing them in a custom feedlot. It is difficult to encourage someone to own their cattle in the feedlot when the price of feed is increasing, but someone has to take the risk. Despite the risk, there could be a nice reward in six months.
BEEF CUTOUT
At midday Friday, the Choice cutout was $375.03 down $1.87 from Thursday and down $1.36 from a week ago. The Select cutout was $354.23 up $3.51 from Thursday and down $7.77 from last week. The Choice Select spread was $20.80 compared to $14.39 a week ago.
Very little change week-over-week from the packer standpoint. Boxed beef prices found themselves on either side of unchanged as the market enters Labor Day weekend. Buying for the long weekend was completed two to three weeks ago for most restaurants, retailers, and food service customers. However, if beef movement is good through the weekend, then there will be buying to restock the beef counter the next couple of weeks. Entities will not purchase at a level that will completely restock the beef counter, because the market is entering a seasonal period that typically has softer demand. The beef market failed to breakout during the summer grilling season, which does not bode well for the market the next three months. This may appear to be a negative to some onlookers, but beef prices have been trading at near record levels (barring one week during Covid) for several months. Beef demand remains strong, and consumers continue to send the signal to the market that they want beef. Prices will decline at some point.
Source : osu.edu