Traditionally, cattle feeders have estimated external fat thickness over the12th rib as one measure of finish, and although some research and carcass contests still ship cattle to the packer as soon as 0.3 inches, the norm has reached nearly twice that.
Feeder cattle markets continue to move higher with a major record high set last week. October feeder cattle futures broke $2 in overnight trade last Wednesday. Good rains have come over the past couple weeks in areas of the Southwest, causing a case of grass fever which has encouraged cattlemen to bid on light calves.
Widespread rains over the Memorial Day weekend may have curtailed holiday activities but were enthusiastically welcomed by cattle producers in the Southern Plains. Much of the worst drought areas in eastern New Mexico, western Texas and western Oklahoma received rainfall that was very timely for forage production.
Last week was the final week retail buyers could fill grocery store coolers with beef ahead of the Memorial Day holiday. That longawaited beef procurement finally came in the 11th hour, bringing up several portions of the cattle and beef market complex.
The most recent Cattle on Feed report came with only a slight surprise; placements were down more than expected. But they were still down, and no one should be surprised by that. The report has been called bullish for the lower-than-expected placements.
Cash fed trade was sluggish last week ahead of the release of the most recent Cattle on Feed report, but by Thursday afternoon, almost 24,000 head had been confirmed sold. Live cattle were trading $144- 147 with averages at $146.09 and $232-236 dressed, averaging $234.
Last week’s release of the most recent World Agricultural Supply and Demand Estimates (WASDE) report was the first of the year to include predictions of the 2015 production rates. The upcoming year is expected to be one of decreasing beef production, but increased production of pork, chicken, corn and soybeans.
The program provides financial assistance to small (less than 500 employees) for-profit companies or U.S. agricultural cooperatives that own a commodity brand, with the provision that products promoted under the program must contain at least 50 percent U.
In the first quarter of 2014, Nebraska steers sold at an average price of $147 per live hundredweight; more than $20 higher than the previous first-quarter record price. Nationally, finished cattle prices were up 17 percent during the first quarter. With production only down 4 percent, the hike has been somewhat unexplained.
“The latter situation will lead to a market, which should have short lived rallies as the trend into the summer is down. The most likely timing of a summer low is the late July/early August period. We would expect a minimum type price break of 8-10 percent from.