Cattle Outlook: Heifer Retention May be Slowing

US - There were nearly 521 million pounds of beef in cold storage at the end of September. This was up 9.3 per cent from the month before, up 4.5 per cent from a year ago, and the most frozen beef for any month since January 2003, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 31 October 2016
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Stocks of frozen pork totalled 642 million pounds on September 30. That is up 5.4 per cent from the last day of August, but down 2.1 per cent from a year ago.

The October cattle on feed report said September placements were down 1.9 per cent and marketings were up 5.5 per cent. The on-feed number is up 0.4 per cent compared to last year. September placements totalled 1.905 million head, the fewest for any September since USDA started this data series in 1996. September placements of cattle weighing 800 pounds or more were 3.1 per cent below the year-ago level. This was the first down month for placements since July 2014.

In an indication that heifer retention may be slowing a bit, the October report said the number of steers on feed was down 1.6 per cent, but heifers were up 4.4 per cent compared to October 1, 2015.

Fed cattle prices were higher last week on light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $103.13/cwt, up $4.89 from last week's average, but down $33.64 from a year ago. The 5-area dressed steer price averaged $161.77/cwt, up $7.75 from the week before, but down $48.02 from a year ago.

Beef cutout value was higher last week. On Friday morning, the choice boxed beef cutout value was $183.11/cwt, up $3.14 from the previous Friday. The select carcass cutout on Friday morning was $169.89/cwt, up $2.31 from last week.

Last week's cattle slaughter totalled 613,000 head, up 1.8 per cent from the previous week and up 10.5 per cent from a year ago. The average steer dressed weight for the week ending on October 15 was 915 pounds, up 4 pounds from the week before, down 15 pounds from a year ago, and below the year-ago level for the 24th consecutive week.

For the second week in a row, cattle futures are strongly higher. The October live cattle futures contract settled at $104.20/cwt, up $3.05 for the week. December fed cattle settled at $104.35/cwt, up $2.48 from the previous Friday. February fed cattle futures settled at $104.92/cwt, up $2.12 from the previous Friday. April live cattle closed at $104.25/cwt.

November feeder cattle futures ended the week at $121.55/cwt, up $1.85 from a week earlier. January feeder cattle gained 50 cents last week to settle at $116.00/cwt. The March contract closed the week at $113.15/cwt.

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