Weekly US Cattle Outlook - Cattle On Feed To Be Down

US - Weekly Cattle Outlook, 18th May 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 21 May 2007
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The average of the trade estimates is for the number of cattle on feed to be down between two and three percent from 2006 on May 1. There is a wide range in estimates of cattle placed on feed during April. The range is from 84 percent to 106 percent. The placement component of the cattle on feed is the most difficult portion of the report to develop. The average of the placements on feed is to be down 3.9 percent. The average of the trade estimates of fed marketings during April is the same as in 2006.

Beef and veal exports during March were up 14.9 percent with the increase at 20.6 percent for the first three months of 2007 compared to a year earlier.

Japan's purchases are up sharply percentage-wise but are still quite small compared to 2003 before BSE. For January - March of 2007 Japan's imports of beef from the U.S. were only 13 percent of the first quarter of 2003.

Beef exports were up 32 percent to Canada, down 8.2 percent to Mexico, up 15.4 percent to the Caribbean, up 54.4 percent to Taiwan, and up 151.3 percent to other for the first three months of 2007 compared to 12 months earlier.

Beef imports for January - March were down 8.6 percent from a year earlier. Our purchases were down 13.8 percent from Australia, down 8.3 percent from New Zealand, about the same from Canada, down 13.3 percent from Brazil, down 51.7 percent from Argentina, up 19.9 percent from Central America, down 13.3 percent from Uruguay, and up 29 percent from Mexico.

The U.S. net import of beef as a percent of production declined from 10.2 percent in 2006 to 8.0 percent in 2007 for the first three months of the year. This is the major reason for the stronger demand for live cattle than beef.

Feeder cattle imports from Mexico for the first three months of the year were down 29.5 percent. Total live cattle imports from Canada for these three months were up 8.3 percent, but total live cattle imports from Canada and Mexico were down 11.2 percent from last year.

Retail Choice beef prices in April were up 2.4 percent from March and up 6.6 percent from April 2006. For January - April retail beef prices were up 1.9 percent from last year.

All of the increase in beef prices has been bid into live fed cattle prices. For April, live fed cattle prices were up 19.3 percent from 2006. For January - April, fed cattle prices were up 5.2 percent from last year. Packer margins were up for these four months, but processor-retailer margins were down enough to offset the packer increases.

Feeder steers and heifers were steady to $3 per cwt higher this week than last week at Oklahoma City. Steer and heifer calves were steady this week with seven days earlier at Oklahoma City.

The prices by weight groups for medium- and large-frame no. 1 steers were: 400-500 pounds $131-138.75 per cwt, 500-600 pounds $120-126 per cwt, 600-700 pound calves $115.50-118.50 per cwt, 600-700 pound yearlings $116-126 per cwt, 700-800 pounds $107.75-114 per cwt, and 800-1,000 pounds $95.50-113 per cwt.

Wholesale beef prices were pushed higher again this week with Choice beef at $166.40 per cwt, up $4.11 per cwt from a week earlier on Friday morning. Select beef prices were up $4.45 per cwt at $154.04 per cwt Friday morning.

The weighted average live price for fed cattle through Thursday at $96.85 per cwt was down $0.24 per cwt from last week. The weighted average carcass price for the five-market area was up $0.07 per cwt at $154.37 per cwt.

Slaughter this week under Federal Inspection was estimated at 702 thousand head, no change from the same date last year.

The May 1 Cattle on Feed report came in quite close to the trade estimate. The number on feed May 1 was down 2.3 percent, placements during April were down 2 percent, and fed marketings during April were up 2 percent from last year. The placement-on-feed number was larger than trade estimates, but fed marketings were also larger than trade estimates. Therefore, the number on feed was very close to the estimate.

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