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Cattle Outlook: High Beef Prices & Cattle On Feed Up

24 October 2011
Ron Plain
Ron Plain

US - USDA's October cattle on feed report was slightly bearish. It said that the number of cattle placed on feed during September was up 0.2 per cent and marketings were up 0.6 per cent, leaving the number on feed 1 October up 4.9 per cent compared to a year earlier.

The pre-release trade forecast expected placements to be down 3.5 per cent, marketings up 0.6 per cent, and the 1 October on-feed number to be up 3.9 per cent.

Retail beef prices were record high during September for the second consecutive month. Choice beef in grocery stores averaged $4.914 per pound, up 4.2 cents from August and 48.9 cents higher than in September 2010.

The September 5-area live weight price for slaughter steers averaged $117.50/cwt.

 

The US dollar reached a record low against the Japanese Yen this week with only 76 yen needed to buy a dollar. The dollar is the weakest against the Chinese Yuan of anytime since 1993. A weak dollar helps boost US exports, but makes imports more costly. Both US beef and pork exports are expected to set annual records this year.

Friday morning the choice boxed beef carcass cutout value was $184.00/cwt, down $1.27 from last week. The select carcass cutout was down 84 cents from the previous Friday to $167.72 per hundred pounds of carcase weight. The choice-select spread, $16.28, is very large.

Despite lower cutout value, fed cattle prices were higher this week. The 5-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $120.73/cwt, up $1.73 from last week.

Steers sold on a dressed weight basis averaged $190.60/cwt, $2.82 higher than the week before. This week last year live steer prices averaged $100.83/cwt and dressed steers averaged $159.09/cwt.

This week's cattle slaughter totaled 651,000 head, up 0.2 per cent from the week before and down 2.7 per cent compared to the same week last year.

The average steer dressed weight for the week ending 8 October was 858 pounds, up three pounds from the week before and down one pound from a year ago. This was the first week with steer weights below year-ago since early December.

Cash bids for feeder cattle around the country this week were mostly steady to $6 higher.

Prices this week at Oklahoma City were steady to $8 higher with price ranges for medium and large frame #1 steers: 400-450# $154-$165, 450-500# $148-$158, 500-550# $144-$154, 550-600# $136-$145.75, 600-650# $130-$147.50, 650-700# $127-$146.75, 700-750# $125-$144.50, 750-800# $138-$140, 800-900# $131.25-$138.50 and 900-1000# $127-$130.

The October live cattle futures contract ended the week at $121.97/cwt, up 27 cents from last week's close. December fed cattle lost $1.05 to end the week at $122.15/cwt. February live cattle futures settled at $124.80/cwt, down 57 cents from last Friday.

 

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