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Weekly US Cattle Outlook: Increase in Export Value

27 January 2009
Ron Plain
Ron Plain

US - Weekly Cattle Outlook, 27th January 2009 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

The value of beef exports for January-November was up 43 percent in 2008 compared to 2007. The value of beef exports per animal slaughtered in January-November was $58.23 in 2007 and jumped to $82.11 per head in 2008.

The value of beef and beef variety exports in January-November 2008 were up 40 percent from a year earlier. The total value of beef and beef variety meat exports per animal slaughtered in 2007 was $75.95 in 2008. This increased to $106.23 per head.

The consumer price index for all items in December 2008 at 210.228, up slightly from a year earlier at 210.036. These values are percent of 1882-84, which equals 100. December was the fifth consecutive month with a decline from the previous month and December was down 4.4 percent from July of 2008.

Declining consumer prices are a mixed bag but in total are not good for all consumers because it means a weak general economy with a relatively large unemployment rate and declining income in total.

Retail prices for beef in December were 1.3 percent below November, but up 6.4 percent from a year earlier. For all of 2008, retail beef prices were up four percent due to reduced supplies per consumer in the U.S. because of population growth and larger exports and smaller beef imports.

All segments of the beef chain benefit from these higher retail prices but even with slightly higher fed cattle prices 2008 was the worst year of record for cattle feeders. The processor-retailer margin was up seven percent and the packer margin was up 13.6 percent from 2007.

The trade expects the number of cattle on feed January 1 to show a reduction of 6.1 percent, placements up slightly at a plus 0.1 percent and in marketings down slightly at a minus 0.7 percent from last year.

Feeder cattle and calf prices this week at Oklahoma City were mostly steady to $2 per cwt lower. The prices by weight group for medium and large frame Number One steers at Oklahoma City this week were: 400-500 pounds $107.25-118 per cwt, 500-600 pounds $103-112 per cwt, 600-700 pounds $94.25-103 per cwt, 700-800 pounds $93-98.25 and 800-1,000 pounds $88.50-94.75 per cwt.

The weighted average live price for fed cattle for the five-market area through Thursday at $81.91 per cwt were down $1.21 per cwt from a week earlier. The weighted average negotiable price in carcass for the five-market area through Thursday at $131.81 per cwt were down $3.49 from seven days earlier.

The price of wholesale beef showed modest changes as it went through the week. Choice beef Friday morning at $148.19 per cwt were down $3.24 per cwt from last Friday and Select beef at $143.86 per cwt were down $0.38 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 632 thousand head, down 0.6 percent from a year earlier.

The Cattle on Feed report for January 1 came in more positive than the trade expected. The number on feed was down 7.1%. The trade estimate was for a 6.1% reduction. Placements on feed during December were down 3.2%. The trade was for a 0.1% increase from 2007. Fed marketings during December were up 2.3%. The trade estimate was for a 0.1% increase. A more detailed summary will be in next week's report.

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