Weekly US Cattle Outlook - Retail beef prices down

US Weekly Cattle Outlook, 26th January 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 27 January 2007
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Ron Plain
Ron Plain

Based on the data, retail beef prices would have been lower than they were if the total marketing margin had not declined by 3.5% in 2006 from a year earlier. The wholesale to retail marketing margin in 2006 was down 7.7% from 12 months earlier, but the packer's margin was up 18.3% from a year earlier. The packer's margin needed to increase for the last two years and has not been kind to beef packers.

Receipts at the Oklahoma City feeder cattle auction were very light this week due to ice and snow. Compared to two weeks ago feeder cattle and calves were not well tested, but a substantial lower price-tone was noted.

The limited prices for medium and large frame number one steers this week were: 493 pounds $104 per cwt, 550-600 pounds $97.50-103.75 per cwt, 600-650 pound yearlings $96-97.25 per cwt, 650-700 pounds $93-95 per cwt, 700 pounds $94 per cwt, 750-800 pounds $92-93.75 per cwt, 800-850 pounds $94-94.60 per cwt and 850-900 pounds $93.50-94.25 per cwt.

The number of cattle on feed January 1 was up 0.6% from a year earlier based on trade estimates. If true, this will be the fourth consecutive month for the number on feed number to decline relative to a month earlier. On September 1, the number of cattle on feed was up nearly 10% from a year earlier.

The placements of cattle on feed during December are expected to show a decline of over 11% from 2005 and fed marketings during December are expected to show a decline of 4.4% from a year earlier.

The weighted average live price for the five-market area through Thursday at $85.75 per cwt was down $1.22 per cwt from a week earlier. The weighted average carcass price in the negotiated trade was down $1.80 per cwt at $138.00 per cwt through Thursday.

The wholesale price of Choice beef Friday morning at $146.48 per cwt was down $6.62 per cwt from a week earlier. Select beef prices were down $4.42 per cwt from 7 days earlier at $136.96 per cwt.

Slaughter this week under Federal Inspection was estimated at 632 thousand head, up 3.9% from 12 months earlier.

The January 1 Cattle on Feed report came in with a few more cattle on feed than the trade estimated. The on-feed number was up 1.4%; the trade expected the increase to be up 0.6%.

Placements on feed during December were down 9%; the trade expected an 11.2% decline. Fed marketings during December were down 5.2%, whereas the trade expected the decline to be 4.4%.

A more detailed summary will be in next week's letter.

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