Ron Plain and Scott Brown
Ag Economics, MU
August 26, 2016
USDA says there were 469 million pounds of beef in cold storage at the end of July. That is up 2.8% from the month before and up 2.0% from the same date last year. This is the most beef in storage for any month since February and the most for any July since 2006.
USDA's August Cattle on Feed report said the number of cattle on feed on August 1 was the most for any August since 2012. July placements were up 1.6% and included a lot of heavy cattle. The calculated average weight for cattle placed on feed has consistently been above the year-ago level for the last 24 months.
This week fed cattle prices were lower in heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $114.81/cwt, down $2.73 from last week's average and down $28.59 from a year ago. The 5-area dressed steer price averaged $180.38/cwt, down $5.68 from the week before and down $46.59 from a year ago.
Beef cutout value was mixed this week. This morning, the choice boxed beef cutout value was $199.73/cwt, down 42 cents from the previous Friday. The select carcass cutout this morning was $194.03/cwt, up 3 cents from last week.
This week's cattle slaughter totaled 600,000 head, up 1,000 head or 0.2% from last week and up 8.5% from a year ago. Year-to-date cattle slaughter is up 4.2% and beef production is up 4.6%.
The average steer dressed weight for the week ending on August 13 was 887 pounds, up 1 pound from the week before, down 13 pounds from a year ago, and below the year-ago level for the 15th week in a row.
USDA's weekly crop progress report said that 18% of U.S. pastures were in poor or very poor condition on August 21. That is up 1 point from the week before and up 2 points from a year ago.
Feeder cattle prices were $4 to $6 lower and stocker calf prices were steady this week at Oklahoma City. Prices for medium and large frame #1 steers by weight group were: 400-450# $170-$186, 450-500# $161-$173.50, 500-550# $153.50-$160.50, 550-600# $150-$162.50, 600-650# $140-$154.50, 650-700# $142.50-$152, 700-750# $139.50-$149.75, 750-800# $136.50-$141.75, 800-900# $133.75-$141.75 and 900-1000# $132.50-$136/cwt.
Cattle futures were lower this week. The August live cattle futures contract settled at $110.35/cwt today, down $3.20 for the week. October fed cattle settled at $106.35/cwt, down $3.90 from the previous Friday. December fed cattle futures settled at $108.10/cwt.
September feeder cattle futures ended the week at $139.92/cwt, down $3.93 from a week earlier. October feeder cattle lost $5.25 this week to settle at $135.95/cwt. November feeder cattle futures closed the week down $5.15 at $132.82/cwt.
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