Weekly US Cattle Outlook: Higher Fed Cattle Prices

US - Weekly Cattle Outlook, 6th March 2009 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 13 March 2009
clock icon 3 minute read
Ron Plain
Ron Plain

Fed cattle prices were higher this week. The 5-area daily weighted average price for slaughter steers sold through Thursday was $81.47/cwt on a live weight basis, up $1.56 from a week earlier but $9.40 lower than a year ago. Steers sold on a dressed basis averaged $129.74/cwt, a penny higher than the week before but $15.58 lower than the same week of 2008.

Choice boxed beef cutout values also were higher this week. On Friday morning, the choice carcass cutout value was $1.3501/pound, up 2.9 cents for the week. The select cutout was up 4.26 cents from the previous Friday to $1.3484 per pound. The choice-select spread is less than a penny per pound. The normal spread for this time of year is 7 cents. The select cutout is 12.62 cents lower than this day last year.

Cattle feeders have suffered huge losses this winter with many closeouts in the red by over $200/head. As often occurs in this situation, feedlots have slowed marketings to try and force up prices. Mostly they have forced up slaughter weights. Steer carcass weight averaged 854 pounds for the week of February 21, up 29 pounds from the same week in 2008. Thus far in 2009 steer weights are up 23 pounds and heifer carcass weights are averaging 19 pounds above the same period last year.

The April live cattle futures contract ended the week at $82.45/cwt, down $3.47 for the week. June settled at $81.07, down $2.83 from the week before. August settled at $82.20/cwt and the October live cattle contract ended the week at $86.00. March feeder cattle futures ended the week at $90.50/cwt, $2.10 lower than last Friday. The April feeder cattle contract settled the week at $90.62/cwt and May closed at 92.25/cwt.

Federally inspected cattle slaughter for this week was 603,000 head, down 2.4% from the week before and down 6.8% compared to a year ago. Thus far in 2009, cattle slaughter has been below year-ago levels for 6 weeks and above last year for 3 weeks. Year-to-date slaughter of dairy cows is up over 20%.

Cash bids for feeder cattle were higher this week. The price ranges at Oklahoma City for medium and large frame steers were: 450-500# $106-$113, 500-550# $108.50-$114, 550-600# $102.50-$107.50, 600-650# $98-$105.25, 650-700# $93.75-$99.50, 700-750# $89-$95, 750-800# $86-$92, and 800-1000# $82-$89.50/cwt.

It’s been a tough winter for cattle producers, but they are not alone. All meat and dairy prices are well below breakeven, and it appears that all are cutting back on production. USDA continues to predict that production of beef, pork, chicken, and turkey each will be lower this year. In total USDA expects red meat and poultry production to be down 1.9% in 2009. The last year all four meats had lower production was 1973.

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