Cattle Outlook: Prices Steady, Slaughter Numbers Down19 November 2012
US - Cattle imports from Mexico fell to just 43 thousand head in September, the lowest level since August of 2010, write Ron Plain and Scott Brown
The big increases in cattle moving into the U.S. from south of the border from December 2011 to July 2012 appear to have run their course, and this will only add to the tight availability of feeder cattle in the coming months. This afternoon's USDA cattle on feed report is expected to show the largest year to year decline in cattle on feed supplies since the summer of 2009.
The choice retail beef price again topped $5 per pound in October at $5.03, 9 cents higher than September. Further price increases are expected and quite frankly necessary in the next couple of years for packers and feedlots to successfully navigate the combination of high corn prices and relatively expensive feeder cattle.
Beef exports trailed year ago levels for the ninth consecutive month in September. It is a difficult economic climate in which to sustain strong beef demand, both internationally and in the U.S. The inability of the choice beef cutout to top $2 per pound despite 14 days at or above $1.98 during 2012 raises concern that customers might not be willing or able in the current environment to pay the prices for beef necessary to return profits to all levels of the beef industry.
Beef carcass cutout values were little changed vs. last week, though movement was in opposite directions as the choice-select spread continues to widen. On Friday morning, the choice boxed beef carcass cutout value was at $192.83/cwt, up 96 cents from last Friday. The select carcass cutout was at $172.33/cwt, down $1.23 for the week.
Fed cattle prices were steady. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.94/cwt, up 48 cents from last week and up $2.64/cwt from the same week last year. Steer prices on a dressed basis averaged $195.13/cwt this week, up 13 cents from a week ago and up 19 cents from a year ago.
This week's cattle slaughter totaled 629,000 head, down 2,000 head from last week, and down 1.6 per cent from a year ago. The average steer dressed weight for the week ending on November 3 was 873 pounds, down 3 pounds from last week.
Oklahoma City feeder cattle prices were steady to $2 lower this week with prices for medium and large frame #1 steers: 400-450# $170-$186, 450-500# $172-$185, 500-550# $143-$177, 550-600# $142-$166, 600-650# $140-$154, 650-700# $133.50-$148.50, 700-750# $131-$146, 750-800# $135-$143, 800-900# $133-$144.75, and 900-1000# $122.50-$126/cwt.
The December live cattle futures contract closed at $126.35/cwt, up 60 cents from the previous Friday. February cattle settled at $130.20/cwt, up 85 cents for the week. April fed cattle contracts settled at $134.15/cwt. The June fed cattle contract ended the week at $130.12.
January feeder cattle futures ended the week at $145.57/cwt, 3 cents lower than last Friday. March feeders closed at $148.20/cwt.
TheCattleSite News Desk