Cattle Outlook: Frozen Beef Stocks Reached January Record

US - USDA's February Cattle on Feed reports said the number of cattle in large feedlots on February 1 was down a tiny 0.04 per cent compared to a year ago, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 1 March 2016
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Ron Plain
Ron Plain

January placements of cattle into feedlots were down 0.6 per cent and January marketings were down 2.2 per cent. January marketings were the lowest for any January since the series began in 1996. Other disappearance during January was also the lowest since the series began in 1996.

USDA estimates there were 27,189 cattle feedlots in the US last year. Of these, 2,189 had capacity of 1,000 head or more and were therefore included in the monthly cattle on feed surveys. These 2,189 large feedlots accounted for 87.2 per cent of fed cattle marketings in 2015.

The latest USDA report of frozen meats says there were 518 million pounds of beef in cold storage at the end of January. That is up 1.2 per cent from the month before, up 5.4 per cent from a year ago, and the most ever for January. Frozen pork stocks were also record high for January.

Fed cattle prices were slightly higher last week in light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $130.66/cwt, up 66 cents from last week's average, but down $26.03 from a year ago. Dressed steer prices averaged $210.55/cwt. That is up 92 cents from the week before, but down $40.82 from a year ago.

On Friday the choice boxed beef cutout value was $218.83/cwt, up $6.57 from the previous Friday, but down $29.01 from a year ago. The select carcass cutout was $213.74/cwt, up $5.20 from last week, but down $32.19 from a year ago.

Last week's cattle slaughter totaled 534,000 head, up 2.5 per cent from last week and up 1.5 per cent from a year ago.

The average steer dressed weight for the week ending on February 13 was 891 pounds, down 8 pounds from the week before, but up 10 pounds from a year ago. This was the 87th consecutive week with steer weights above the year-ago level.

Prices at the Oklahoma City Stockyards this week were $5 to $10 higher on feeder steers and on calves compared to last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $210-$222, 450-500# $200-$217, 500-550# $175-$213.50, 550-600# $165-$196.50, 600-650# $168-$189.75, 650-700# $156-$175, 700-750# $156.50-$166.25, 750-800# $150-$163, 800-900# $139-$155 and 900-1000# $135.50-$147/cwt.

Cattle futures were higher this week. The February live cattle futures contract settled at $137.55/cwt today, up $2.18 for the week. April fed cattle settled at $137.00/cwt, up $3.05 from the previous week. The June contract ended the week at $125.95/cwt, up $2.80 from the previous Friday.

March feeder cattle ended the week at $158.65/cwt, up $2.78 from a week earlier. April futures gained $4.23 this week to close at $158.85/cwt. May feeder cattle settled at $157.40/cwt.

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