Cash fed cattle trade got underway early last week at prices lower than
the previous week. Trading was light to moderate in all feeding regions
last Wednesday. Compared to Tuesday, live sales in the southern Plains
sold in a narrow range from $95-95.50. There were more than 35,000 head
traded in Kansas at $95-95.50 live basis and $152.50 dressed. Compared
to the prior week, live sales were $1-1.50 lower in Nebraska where
29,639 head had been traded as of Thursday and in Colorado, cattle
traded in a range of $96-97.50. In the western Corn Belt, dressed sales
were called $2-2.50 lower at mostly $96. Dressed sales in the northern
Plains and western Corn Belt were $1-3 lower from $153-156.
The cattle on feed report issued by USDA on March 23 showed market
support for the next few months in the form of lower cattle on feed
numbers and a reduction in the number of front-end ready cattle in
feedlots. Cattle feeders have done a good job moving cattle over the
course of the last two or three months and the current state of feedlots
should help support the market in the mid-$90 range or better, according
to market analysts.
Interestingly, the report did show a shift in the placement pattern,
with northern tier feedlots placing larger numbers of cattle than
southern states. High corn prices have fueled a debate about whether
cattle feeding areas would shift to the north in favor of cheaper and
more readily available corn supply. Although it remains to be determined
whether the shift will be long-lived, it will certainly add a new
dynamic to the markets over the next few years. This could be the
beginning of several new opportunities for the northern Plains region.
Meanwhile, beef product movement remains soft and is expected to remain
so for the near-term. However, as spring weather begins to warm things
up across the nation and buyers begin to seek beef products for
grilling, retail sales should pick up again. Once that begins to occur,
many market analysts expect fed cattle prices to move from the mid-$90
range back toward the $100 level by mid- to late-April. Last week, boxed
beef prices were showing the signs of some of that market weakness as
poor weather conditions spread across the nation. Choice boxed beef lost
$1.47 to trade at $152.63 by mid-day last Thursday. Select was trading
$1.05 lower at $143.51. Packers were reporting fairly good boxed beef
movement, with 468 loads of cuts, trim and grind shipped on heavy
offerings of product.
Despite the slow movement of beef out of warehouses, packers had not
reduced kill levels much from prior week or prior year levels. Last
Thursday, packers harvested 120,000 head. That number was 4,000 head
fewer than last week and last year. For the week to date total through
last Thursday, packers had harvested an estimated 484,000 head, down
from 499,000 the previous week, but above the year-ago tally of 482,000
The cow beef market also worked its way lower last week, losing $1.01
last Thursday to trade at $104.54. The 90 percent lean was selling at
$124.46, down $1 from the previous day and the 50 percent trim was
trading at $55.68. Continued heavy slaughter of cull cows has pressured
prices lower. Prices are now well below last year’s levels when the cow
cutout value was over $114 during the same week. The 90 percent lean was
nearly $20 below last year’s level, while the 50 percent lean was above
last years price of $45.24.
On the Chicago Mercantile Exchange (CME), trade last Thursday closed
mostly higher with the exception of April and May 2008 contracts, which
closed down slightly. The up front contracts were slightly higher, with
April adding 20 points to close at $96.37. June was up 52 points,
closing at $93.95 and August posted the session’s largest gain, closing
up 70 points at $91.72.
It’s easy to appreciate the sight of pastures greening up in the spring,
especially after a long and hard winter. It’s even better for many
cow/calf producers as the coming grass and a variety of factors continue
to positively influence the feeder cattle market. This is good news for
producers who have some fall calves to sell.
The demand for cattle ready to go to grass remains very good. Thin
cattle brought significantly more money at auction markets across the
West when compared to their heavier conditioned counterparts.
“These thin cattle are worth quite a bit more to me as the pastures
around here are beginning to green up,” said Roger White, northeastern
Colorado cattle producer. “I plan to turn out several hundred head and
graze them through the summer. At least that's the plan.”
In addition to the bout of spring fever that is hitting the western
regions as many areas are already making it to 70 degrees, the corn
futures dropped sharply last week. May corn futures settled at $3.91 per
bushel. This is a decrease of almost 40 cents since the beginning of
March. The CME feeder cattle index also increased last week from $104.71
“I’m sure with the decrease in corn futures and the optimistic outlook
regarding the fed cattle market, cattle buyers are given a little more
money to work with,” said White. “These feedlot owners can finally pay a
little bit more for these feeder cattle and not take so much risk. From
a cow/calf standpoint, this sure is nice to see.”
In Galt, CA, feeder steers and heifers were $2 to $3 higher. Steers
averaging between 500 and 600 lbs. ranged between $107 and $118.50.
Their heifermates sold between $100 and $109.50. Heavier steers
averaging between 700 and 800 lbs. sold for $90 to $99 while heifers of
a similar type and kind sold between $86 and $94.25. There were several
heavier weight heifers. Those weighing between 900 and 1,000 lbs. sold
between $72 and $86.25.
In Billings, MT, the overall quality was less attractive than the
previous week and feeder steers were $2 to $4 lower. However, on thin
fleshed five weight steers, there were instances of $4 higher. Feeder
heifers were steady to $4 lower. There were instances of thin fleshed
500 lb. heifers being $4 higher. Demand was good for thin fleshed, high
quality cattle. There was less demand for plain types. Steers averaging
535 lbs. called for $126 and thin heifers averaging 512 lbs. sold for
In Fort Collins, CO, stocker steers and heifers sold with a firm
undertone noted. A lower undertone prevailed on feeder steers and
heifers over 650 lbs. Buyer demand was good on grazing classes and
moderate to light for cattle entering the feedlot. Steers averaging 522
lbs. sold for an average of $119.25 while those weighing 695 lbs. sold
for $105. Five weight heifers sold for $108 and the heavier females
weighing 686 lbs. called for $92.25.
Just to the south in Dalhart, TX, feeder steers and heifers were mostly
steady except for 500 to 700 lb. heifers which sold mostly for $1 to $2
lower when compared to the previous week. Trade was active and demand
was good. Steers weighing between 500 and 550 lbs. sold for an average
of $130. Similar females averaged only $107.
Oklahoma City, OK, had another large run last week with 7,330 head.
Feeder steers were $1 to $3 higher and heifers were lightly tested but
were $1 higher. Stocker cattle and calves were $4 to $6 higher. Demand
was very good for all classes. There were many consignments of thin
cattle offered with weighing conditions attractive to cattle buyers with
grass cattle orders. Steers averaging 519 lbs. sold for $131. Fleshy
steers at a similar weight only sold for $123 while thin cattle weighing
508 lbs. called for $139.50. Heifers weighing 524 lbs. sold for $115
while females averaging 625 lbs. sold for $111.75.
In Lexington, NE, over 2,400 head of steers and heifers trended mostly
steady to $3 higher. Offerings with low flesh scores brought a
significant premium. Thin steers averaging $524 lbs. sold for $139.93
while fleshy steers weighing 577 lbs. averaged $131.80. Heifers
averaging 526 lbs. sold for $121 and heavier weight, fleshy heifers
weighing 748 lbs. sold for $97.50.
To the north in West Fargo, ND, feeder steers weighing 650 lbs. and less
sold $1 higher while heavier steers weighing 650-900 lbs. sold $2 to $3
lower. Feeder heifers sold unevenly steady. There was good demand,
especially for lighter weight cattle. Five weight steers averaged
$119.91 while those weighing 750 lbs. were worth $106.75. Heifers
averaging 480 lbs. sold for $109.75 and the heavier females, which
averaged 807 lbs., sold for an average of $93.19.