29 March 2010

3 minute read

North America

Ron Plain

Cattle prices had another good week. The seasonal pattern is for rising cattle prices in early spring and this year is no exception. This week’s price for slaughter steers is $11/cwt higher than at the start of the year, 7 weight cattle are up by $10/cwt, and 5 weight steers are up $20/cwt from early January.

Seasonally, fed cattle prices are usually the first to peak and start to decline. But, the latest report of feedlot inventories is encouraging. USDA’s March cattle on feed report said we began this month with the lowest on-feed inventory for any March in the last seven years. Marketings have been above year-ago for four consecutive months and placements have been below year-ago for four consecutive months. Light placements and low on-feed inventory means low fed cattle slaughter in coming months. Fewer cattle on feed is not surprising. The number of cattle on feed has been below year-ago levels for 21 of the last 23 months. If these higher cattle prices are to be sustained, meat demand has got to strengthen.

On Friday morning, the choice carcass cutout value was $1.63/pound, up 6.9 cents for the week, and 29.7 cents higher than last year. The select cutout was up 6.35 cents from the previous Friday to $1.6092 per pound. The beef cutout is the highest since September 2008.

Fed cattle prices were higher again this week. The five-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $96.02/cwt, up $1.77 from a week earlier and $12.97 higher than a year ago. Steers sold on a dressed basis this week averaged $152.13/cwt, 30 cents higher than the week before and $19.78 higher than the same week of 2009. These are the highest weekly average prices since early October 2008.

This week’s cattle slaughter equaled 615,000 head, down 1,000 head from the previous week and up 5.2 per cent compared to a year ago.

Steer carcase weights averaged 823 pounds the second week of March which was down two pounds from the week before and 28 pounds lighter than a year ago. Steer weights have been below year-earlier levels for each of the last 16 weeks.

Cash bids for feeder cattle this week were steady to $3 higher at most locations around the country. The price ranges at Oklahoma City for medium and large frame steers were: 400-450# $137-143.85, 450-500# $126.50-130.50, 500-550# $125-$127, 550-600# $119.85-$123.25, 600-650# $114-$123.25, 650-700# $107-$113.50, 700-750# $107.50-$112, 750-800# $102-$106.75, and 800-1000# $93.50-$103.85/cwt.

Cattle futures had a rough week. The April live cattle futures contract ended the week at $94.02/cwt, down $3.95 for the week. June settled at $91.57, down $3.55 from the week before. August settled at $89.35/cwt off $3.12, and the October live cattle contract ended the week at $92.35.

Feeder cattle futures also moved lower this week. The April contract lost $1.47 to end the week at $107.20. May settled at $108.15, down $2.22 for the week.

TheCattleSite News Desk