Both cash cattle prices and cattle futures were sharply lower this week.
There were 477 million pounds of beef in cold storage at the end of August. That is 1.5% more than the month before, 1.3% more than a year ago and the most since February. Stocks of pork in cold storage were down 7.1% year-over-year and frozen chicken stocks were down 0.7% to the lowest level since July 2015.
The number of cattle placed on feed during August was up 15.1% compared to a year ago. That was the biggest year-over-year change in placements since April 2013. As has been the case for the last 25 months, placements have been skewed toward heavy cattle. The number placed weighing less than 600 pounds was down 8.9% in August. The number placed weighing more than 800 pounds was up 21.2%. Heavy placement weights imply both short feeding periods and heavy slaughter weights.
Fed cattle prices this week were lower on heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $103.36/cwt, down $3.27 from last week’s average and down $15.25 from a year ago. The 5-area dressed steer price averaged $161.92/cwt, down $5.98 from the week before and down $25.59 from a year ago.
Beef cutout value was mixed this week. This morning, the choice boxed beef cutout value was $187.94/cwt, up 77 cents from the previous Friday, but down $18.81 from this week last year. The select carcass cutout this morning was $178.93/cwt, down 38 cents from last week and down $24.45 from a year ago.
This week’s cattle slaughter totaled 611,000 head, up 3.2% from last and up 7.4% from a year ago. Female slaughter is up. Thanks to two extra weekdays than last year, August cattle slaughter was up 18.5%. Steer slaughter was up 15.5% and heifer slaughter up 23.8%.
The average steer dressed weight for the week ending on September 17 was 905 pounds, up 2 pounds from the week before, down 18 pounds from a year ago, and below the year-ago level for the 20th week in a row.
Feeder cattle prices were $5 to $8 lower this week at the Oklahoma City auction. Stocker cattle prices were steady to $5 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $150-$155.50, 450-500# $146-$157.75, 500-550# $136-$139, 550-600# $124.50-$142, 600-650# $127.50-$140.50, 650-700# $120-$139, 700-750# $122.50-$140, 750-800# $128-$131.50, 800-900# $127-$134 and 900-1000# $118-$127.25/cwt.
The October live cattle futures contract settled at $98.90/cwt today, down $8.37 for the week. December fed cattle settled at $100.12/cwt, down $6.73 from the previous Friday. February fed cattle futures settled at $100.60/cwt.
October feeder cattle futures ended the week at $123.15/cwt, down $9.20 from a week earlier. November feeder cattle lost $10.07 this week to settle at $119.65/cwt.
Ron Plain and Scott Brown
Ag Economics, MU
September 30, 2016