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Weekly US Cattle Outlook - Number on Feed Down

27 October 2008
Ron Plain
Ron Plain

US - Weekly Cattle Outlook, 24th October 2008 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

The Cattle on Feed report for October 1 came in a little more positive than the trade estimates. The USDA estimate showed the number on feed down 5.0 percent, the trade estimate was for a 4.5 percent decline. Placements of cattle on feed during September were down 5.5 percent and the trade estimate was for a 3.6 percent decline. Fed marketings during September were up 6.8 percent and the trade estimate was for a 6.4 percent growth.

The futures market on Monday, October 20 showed very modest market change with most contracts down a little at the close. Some or all of the decrease in live cattle futures on Monday probably was due to corn prices being up about $0.15 per bushel for all contracts.

A surprise was the sex of cattle on feed in October. The number of steers and steer calves was down 4.7 percent, but heifers were down 5.5 percent. Usually when cattle producers are reducing the size of the cattle herd the number of heifers on feed will show a larger growth or a less decline then steers on feed.

The weight of cattle placed on feed during September was heavier then a year earlier.

The number placed weighing less than 600 pounds was down 27 percent, the 600-699 pounds number placed was down 17.8 percent, the number weighing 700-799 pounds was down 4.2 percent, but the number weighing over 800 pounds was up 19.7 percent from a year earlier. This is consistent with the higher feed prices to place cattle on feed heavier for a shorter feed period.

Retail beef prices for September were down 0.6 percent from August, but up 6.6 percent from September 2007. For January-September, retail beef prices were up 2.9 percent from 12 months earlier.

All segments of the cattle industry benefitted from the higher retail prices. The processor-retailer margin increased 4.8 percent, the packer margin increased 9 percent, and the cattle feeder fed cattle prices were up 1.7 percent for the first nine months of 2008.

Feeder steers and heifers at Oklahoma City this week were $1-3 per cwt higher then last week. Steer and heifer calves sold $5-10 per cwt higher than seven days earlier.

The range in prices by weight groups for medium and large frame No. 1 steers this week were: 400-500 pounds $121-128 per cwt, 500-600 pounds $105.75-120.50 per cwt, 600-700-pound calves $93-106 per cwt, 600-700-pound yearlings $97-107 per cwt, 700-800 pounds $96.25-100.25 per cwt and 800-1,000 pounds $91.75-99.50 per cwt.

Wholesale Choice beef prices this Friday morning at $141.62 per cwt were down $3.03 per cwt from a week earlier. Select beef prices at $135.32 per cwt were down $2.47 per cwt from last Friday morning.

The weighted average live fed cattle price for the five-market area through Thursday at $89.80 per cwt was up $0.47 per cwt from a week earlier. The weighted average negotiated carcass price was at $138.00 per cwt, up $1.00 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 647 thousand head, down 3.9 percent from 12 months earlier.

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