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Weekly US Cattle Outlook - Live Prices Down

15 September 2008
Ron Plain
Ron Plain

US - Weekly Cattle Outlook, 12th September 2008 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

Cattle feeders held off selling last week long enough to get prices with $0.50 per cwt live of a week earlier for the full week. The live prices through Thursday were down nearly $2.00 per cwt which is much more consistent with the nearly $2-4 per cwt decline in wholesale beef prices Friday morning of last week compared to a week earlier.

Cow slaughter continues to run above a year earlier. For the year through the week ending August 23 total cow slaughter was 9.1 percent above the same period in 2007, dairy cow slaughter was up four percent and beef cow slaughter for this period was up 13 percent from 12 months earlier. The rate of increase in slaughter has speeded up. For the four week period ending August 26, slaughter was up for all by 31.8 percent, dairy cow up 14.4 percent and beef up 27.9 percent from last year.

Certainly the number of heifers retained is a very important factor as to changes in cow herd size. However, with this much increase in cow slaughter the odds seem high that producers are speeding up the decline in the cow herd, which is something the industry must do. The quicker the reduction in the herd happens, the quicker cattle prices will increase back to profit level.

Compared to two weeks ago, feeder steers at Oklahoma City were steady to $1 per cwt higher, feed heifers steady and calves steady to $4 per cwt higher than 14 days ago.

The price for medium and large frame Number One steers by weight groups were: 400-500 pounds $119-134 per cwt, 500-600 pounds $112-123.75 per cwt, 600-700-pound calves $102-115.75 per cwt, 600-700-pound yearlings $113.75-117.25 per cwt, 700-800 pounds $110.50-113 per cwt and 800-1,000 pounds $102-111.50 per cwt.

Average dressing cows even with the increase in slaughter number are higher then 12 months earlier. For this week in 2007, average dressing breakers were selling for $52-55.25. This week the same grade of cows sold for $56-59 per cwt, average dressing bones this week last year sold from $51.75-53 per cwt, this week the same grade of cows sold for $57.50-61 per cwt. Lean cows average dressing were $48.50-51.50 last year and were $51.50-55 per cwt this week. Light cows average dressing were $48.50-49 per cwt this week these cows sold for $51-50.55 per cwt at Oklahoma City.

These higher cow prices ever with larger cow slaughter is probably due to two things, higher beef prices and reduced beef imports which is mostly boneless beef for processing. For January-June, beef and veal imports were down 21.5 percent from last year.

Wholesale beef prices Friday morning showed Choice beef at $160.76 per cwt up $4.50 per cwt from a week earlier. Select beef at $158.65 per cwt was up $6.43 per cwt from seven days earlier.

The weighted average price of fed cattle live for the five-market area at $96.20 per cwt through Thursday down $0.80 per cwt from a week earlier. The weighted average carcass price for negotiated cattle for the five-market area at $151.54 per cwt was down $2.86 per cwt from last week.

Slaughter this week under Federal Inspection was estimated at 657 thousand head, up 1.9percent from a year earlier.

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