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Weekly US Cattle Outlook - Fed Cattle Prices Fall

13 October 2008
Ron Plain
Ron Plain

US - Weekly Cattle Outlook, 10th October 2008 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

Fed cattle prices for the full week last week were pushed between two and three dollars per cwt below a week earlier.

A significant part of the weakening is due to a weak domestic consumer demand, which was down five percent for January-August from a year earlier.

The male-female slaughter ratio for August was at 1:11 was substantially below a year earlier 1:22 and the 10 year average of 1:18. The smaller ratio indicates a larger share of the slaughter ratio is female, another indication that producers are reducing the size of the breeding herd. Remember the beef cow breeding herd was down a little on both January 1 and July 1 of this year compared to a year earlier.

The corn price in the futures market this week at $4.00 plus some change was down close to 50 percent from the high in June. These lower prices need to be looked at closely as a buying opportunity for cattle feeders.

Feeder cattle and calves took a hard hit this week at Oklahoma City with prices down $5-$10 per cwt from a week earlier.

The price range by weight groups for medium and large frame No. 1 steers at Oklahoma City this week were: 400-500 pounds $107.50-119.50 per cwt, 500-600 pounds $103-113 per cwt, 600-700- pound calves $85-94.25 per cwt, 600-700 pound yearlings $96.50-102.25 per cwt, 700-800 pounds $95.50-99.50 per cwt and 800-900 pounds $93-96 per cwt.

Wholesale beef cutout prices took a roller coaster ride this week with a $4 per cwt increase in Choice beef on Monday, then over a $6 decline on Wednesday. On Friday morning, Choice beef at $149.86 per cwt was down $2.83 per cwt for the week. Select beef at $143.64 per cwt was down $3.31 per cwt from seven days earlier.

Some of this uncertainty in the financial markets carried over into the cattle market this week with the weighted average price the five-market at $91.50 per cwt down $4.50 per cwt from Thursday last week. The weighted average negotiated carcass price for the five-market area through Thursday at $140.85 down $7.15 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 650 thousand head, up 1.7 percent from a year earlier.

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