Beef Production Down
US - The US Commerce Department has lowered their estimate of the US gross domestic product. They now estimate the US economy grew at an annual rate of only 1.6 per cent during the second quarter of 2010 rather than the 2.4 per cent rate they earlier reported.Ron Plain
That was the second straight quarter of slowing growth and implies growth could turn negative later this year. It goes without saying that slow economic growth is not good for meat demand.
Statistics Canada reports that the Canadian cattle herd was down 4.9 per cent on July 1. This is the fifth consecutive year their cattle inventory has been below year-ago. Canadian cattle numbers are down 17 per cent compared to five years ago. Their beef cow inventory was down 5.1 per cent at midyear and the number of dairy cows was down 0.1 per cent. Both beef replacement heifers and dairy replacement heifers are down roughly two per cent compared to July 1, 2009.
US beef production is down, beef imports are down, and beef exports are up, making domestic supplies tight. There were only 388 million pounds of beef in cold storage on July 31. That was 12.7 per cent less than a year earlier and the lowest of any July since 2005.
Fed cattle prices moved higher for the fourth consecutive week. The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $99.05/cwt, up 45 cents from a week earlier and $14.64 higher than a year ago. Steers sold on a dressed weight basis averaged $155.00/cwt this week, also 45 cents higher than the week before and $23.33 higher than last year.
On Friday morning, the choice boxed beef carcass cutout value was $1.6459/pound, up 3.3 cents for the week and 20.57 cents higher than last year. The select cutout was up 3.32 cents from the previous Friday to $1.5757 per pound.
This week's cattle slaughter totaled 678,000 head, up 1.6 per cent from the previous week and up 3.0 per cent compared to the same week last year.
Steer carcass weights averaged 840 pounds during the week ending August 14. That was down 4 pounds from the week before and 17 pounds lighter than a year ago. This was the 38th consecutive week with steer weights below year earlier levels.
Cash bids for feeder cattle this week were mostly in the range of steady to $3 higher with Missouri reporting instances of prices $3 lower than last week. The price ranges at Oklahoma City for medium and large frame steers were: 400-450# $135.50-$145.50, 450-500# $130-$140, 500-550# $126-$134, 550-600# $117.75-$126, 600-650# $108.75-$123.25, 650-700# $116-$121.75, 700-750# $117-$119.25, 750-800# $113-$117.25, and 800-1000# $106-$113.25/cwt.
The August fed cattle futures contract ended the week at $98.05/cwt, down $1.55 from a week earlier. The October contract closed at $98.10/cwt and the December contract settled at $100.75.
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