Cattle Outlook

US - USDA’s January Cattle on Feed report said feed yard placements during December were up a whopping 16.1 per cent compared to a year ago, writes Ron Plain from the University of Missouri.
calendar icon 31 January 2011
clock icon 3 minute read
Ron Plain
Ron Plain

Marketings during December were up 4.8 per cent leaving the number of cattle on feed at the start of 2011 up 4.6 per cent. The placement number was larger than pre-release trade estimates and marketings lower, leaving the on-feed number a bit higher than expected. Placements were higher in each weight class with the number of cattle placed on feed weighting more than 800 pounds up 28.8 per cent compared to December 2009.

For all of 2010, placements were up 1.165 million head (5.2 per cent) compared to 2009 and the largest for any year since 2007. This increase in placements is surprising given the size of the annual calf crop has been steadily declining for more than a decade. A small part of the increased placements can be explained by a roughly 200 thousand head increase in feeder cattle imports.

The number of heifers on feed was up 4.7 per cent on January 1 to the highest number in three years. Lots of heifers in feed yards indicate the reduction in the cow herd continues.

Fed cattle prices were lower this week. The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $104.31/cwt, down $1.50 from a week earlier. Steers sold on a dressed weight basis this week averaged $167.70/cwt, $2.82 lower than the week before. This week last year slaughter steer prices averaged $83.46/cwt live and $135.64/cwt dressed.

The boxed beef cutout value was mixed this week. On Friday morning the choice boxed beef carcass cutout value was $172.55/cwt, down $1.24 for the week. The select cutout was up 17 cents from the previous Friday to $171.12 per hundred pounds of carcass weight. Eight weeks ago the choice-select spread was over $11/cwt. It is now only 1.43/cwt.

This week’s cattle slaughter totaled 650,000 head, up 3.2 per cent from the week before and up 3.0 per cent compared to the same week last year.

Steer carcass weights averaged 849 pounds during the week ending January 15. That was down 3 pounds from the week before but 10 pounds heavier than a year ago.

Cash bids for feeder cattle around the country this week were mixed, $4 higher to $6 lower. Oklahoma City prices were $3 to $6 lower than the previous week with price ranges for medium and large frame #1 steers were: 400-450# $152-$160, 450-500# $143-$157, 500-550# $138-$155.50, 550-600# $142-$143.50, 600-650# $131-$137.50, 650-700# $128-$135, 700-750# $124.50-$131.50, 750-800# $121.75-$134, and 800-1000# $114.50-$126/cwt.

The February fed cattle futures contract ended the week at $107.50/cwt, down 45 cents from a week ago. The April contracted closed out the week at $112.77/cwt, up 10 cents and June settled at $113.37/cwt, up 72 cents. December fed cattle futures ended the week at $117.35/cwt.

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