Cattle Outlook: Cattle on Feed Placements Down, Marketings Up

US - USDA's January Cattle on Feed report said December placements were down 0.8 per cent while marketings were up 1.1 per cent. This resulted in the number of cattle on feed at the start of 2016 to be down 0.5 per cent compared to a year ago, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 25 January 2016
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Ron Plain
Ron Plain

Placements of feeders weighting less than 600 pounds was down by 14.8 per cent during December; placements weighing 600-699 pounds were down 2.7 per cent; placements weighing 700-799 pounds was up 6.9 per cent and placements weighing 800 pounds or more was up 10.0 per cent compared to December 2014.

The average price of a pound of choice beef at retail during December was $5.972. That was down 24.1 cents from the month before, down 33.8 cents from a year ago, and the lowest for any month since July 2014. The December average grocery store price for all fresh beef was $5.885 per pound, down 10.4 cents from the month before and down 9.7 cents from December 2014.

The 5 area average live price for slaughter steers was $124.70/cwt during December. That was down $3.60 from the month before and down $38.40 from a year ago. This is the lowest monthly average steer price since August 2013.ª

Fed cattle prices were lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $126.62/cwt, down $6.90 from last week's average and down $32.89 from a year ago. The 5 area average dressed price this week for steers was $202.00/cwt, down $7.57 for the week and down $54.03 compared to the same week last year.

This morning the choice boxed beef cutout value was $225.43/cwt, down $7.22 from the previous Friday and down $28.45 from a year ago. The select carcass cutout was $220.98/cwt, down $6.65 from last week and also down $28.45.

This week's cattle slaughter totaled 569,000 head, up 0.2 per cent from last week, but down 2.1 per cent from a year ago.

The average steer dressed weight for the week ending on January 9 was 902 pounds, down 2 pounds from the week before, but up 13 pounds from a year ago. This was the 82nd consecutive week with weights above the year-ago level.

Prices at the Oklahoma City Stockyards this week were $6 to $8 lower on feeder steers and $10-$15 lower on calves than last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $204-$226, 450-500# $198-$214.50, 500-550# $183.50-$199, 550-600# $168-$185.50, 600-650# $162-$169, 650-700# $145-$167.50, 700-750# $152-$165.50, 750-800# $147.50-$155.50, 800-900# $137.50-$149.75 and 900-1000# $138-$142.25/cwt.

Cattle futures were higher this week. The February live cattle futures contract settled at $132.07/cwt today, up $4.52 for the week. April fed cattle settled at $133.07/cwt, up $4.57 from the previous week. The June contract ended the week at $123.85/cwt, up $4.10 from the previous Friday.

January feeder cattle ended the week at $159.42/cwt, up $5.12 from a week earlier. March futures gained $7.63 this week to close at $157.90/cwt. April settled at $157.82/cwt.

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