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CME: Decline in Cattle Weights More Significant in 2017

24 April 2017

US - Cattle and hog weights have been trending in opposite directions in the last few weeks. Some of this is seasonal but it also may reflect some of the short-term supply issues in both markets, reports Steiner Consulting Group, DLR Division, Inc.

USDA reported that for the week ending 8 April the average dressed carcass, this is both fed and non-fed cattle, was 802 pounds. This is 20 pounds lighter (-2.4 per cent) than a year ago and 22 pounds lighter than the five year average.

Cattle weights normally decline into the spring but the decline this year has been more significant than usual. The five year average carcass for all cattle at the start of the year was around 810 pounds per carcass and by the end of April the five year average stands at 794 pounds, a 2 per cent decline.

This year carcass weights in early January stood at an average 837 pounds and since then have declined 4.2 per cent, more than double the five year average rate. The decline in fed cattle carcass weights has been even more dramatic and has been the primary contributor for the weight reduction.

The average fed steer carcass weight for the latest reported week was 852 pounds, 28 pounds (-3.2 per cent) lower than a year ago and now about 6 pounds less than the five year average. The five year average decline for steer weights between early January and the end of April is around 3.4 per cent.

So far we are down 5.8 per cent for the year and it is very likely we will see further declines in weights through the end of this month. At this point it looks possible that steer weights may eventually get as low as 840-845 by early-May before starting their seasonal upswing.

Heifer weights have declined just as sharply this year. Keep in mind that heifers are smaller than steers. An increase in the percentage of heifers in the slaughter mix (keep an eye on this in the Cattle on Feed report) will also tend to lower overall cattle carcass weights. The average weight of heifers in the latest report was pegged at 792 pounds, 26 pounds (-3.2 per cent) lower than last year.

The implication of the lower weights is both direct and indirect. Lower weights will subtract from beef production. While fed cattle slaughter for the week of 8 April was around 6 per cent higher than the previous year, fed beef production for the week likely increased by less than 3 per cent from the previous year.

And with robust exports and less imports coming in, the amount of beef available to the domestic user likely was less than a year ago. The indirect implication of the fed cattle weights has to do with the supply conditions in the feedyards.

The sharp decline in weights indicates that feedlots are much more current than a year ago and also more current than normal. A current yard does wonders for the testicular fortitude of a feedlot operator.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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