Weekly US Cattle Outlook - Calf slaughter up

US - Weekly Cattle Outlook, 16th March 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 19 March 2007
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Calf slaughter under Federal Inspection has been up substantially since September of 2006. The first month that showed a larger calf slaughter than a year earlier was October, which was up 14.5% from 2005. November was up 19.3%, December was up 14.1%, January of 2007 was up 45.4% and February through February 24 was up 19.6%.

This is another sign that producers are currently reducing the size of the cattle herd due to the short supply of forage, which is very expensive in some areas.

Beef exports in January were up 9.5% from a year earlier. Japan was up substantially percentage-wise in their purchases during January, but still was only about 9.5 million pounds carcass weight equivalent. Canadian purchases in January were up 26.8%, Mexico was down 21.6%, Caribbean was up 46.9%, Taiwan was up sharply in percentage but only amounted to about 6.1 million pounds carcass weight and other was up 110.5% from 2006.

Beef imports in January 2007 were down 7.1% from 12 months earlier. All of our major suppliers of beef showed some reductions in their sales to the U.S.

Feeder cattle imports from Mexico during January were down 63.5% from 12 months earlier and live cattle imports from Canada were up 17% from a year earlier. Total live cattle imports for January 2007 were down 25.2% from 2006.

Feeder cattle prices at Oklahoma City were steady to $2 per cwt higher than last week. Steer and heifer calves were $2-5 per cwt higher than 7 days earlier.

The prices by weight groups for medium- and large-frame number one steers this week at Oklahoma City were: 440 pounds $132 per cwt, 450-500 pounds $128-138 per cwt, 500-600 pounds $122.50-129 per cwt, 600-700 pound yearlings $108-122.50 per cwt, 700-800 pounds $101.50-111.50 per cwt and 800-1,000 pounds $94-105 per cwt.

Wholesale beef prices pushed substantially higher this week with Choice beef at $164.64 per cwt, up $5.01 per cwt Friday morning from a week earlier. Select beef was up $5.39 per cwt at $156.09 per cwt.

Fed cattle prices were also pushed higher this week. The live weighted average price for the five-market area for the week through Thursday was up $0.60 per cwt at $98.45 per cwt compared to a week earlier. The weighted average carcass price for the five-market area at $159.25 per cwt was up $4.19 per cwt from 7 days earlier.

Dressed carcass weights continue to run below a year earlier. For the week ending February 24, steer carcass weights at 815 pounds were 10 pounds lighter than a year earlier. Heifer carcass weights under Federal Inspection were at 759 pounds, down 12 pounds per head from 12 months earlier.

More stress than a year earlier from weather and high corn prices are the major reasons for the lighter weights.

With the tighter supply of cattle coming out of feedlots in coming weeks, fed cattle prices are likely to continue strong.

Slaughter this week under Federal Inspection at 631 thousand head was up 1.3% from a year earlier.

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