There was only very light fed cattle trade last week as of press time.
In the northern tier fed cattle market, there were a few thousand head
traded at $160 dressed basis, which was about $5 higher than the prior
week’s sharply higher weighted average. However, in the remainder of
cattle feeding regions, ask and offer prices were still well apart. Fed
cattle in the southern tier were expected to trade in a range of
$100-101, as much as $1-2 higher, although it appeared likely that
packers would wait until last Friday to replenish what were thought to
be relatively short supplies.
The last fully established market for fed cattle was the previous
Friday, March 9. Live sales traded at $98-99 in the southern Plains. In
the North, live sales traded at $97-99, with dressed sales at $155.
Erica Rosa, agricultural economist for the Livestock Marketing
Information Center (LMIC), said last week that good management at the
feedlot level has contributed to the current run up in live cattle
“Cattle feeders are in a good position right now and the market is a
reflection of that. The rise in prices is a combination of feeders doing
a good job of controlling inventory and a lot of light-weight placements
last year, which cattle feeders can better manage for market timing,”
Rosa said. “Cattle feeders have been watching the rising prices in
wholesale markets and are realizing that there hasn’t been an increase
in buying by packers or a reduction in kill-level.”
That’s put feedlots in a solid position to hold out for better money as
the market moves toward its normal seasonal peak sometime in March or
April. Although she declined to speculate about where or when the market
may reach its peak.
“We are going to see the wholesale prices drop off. Packers are going to
need to move some product. Cutout prices are up right now, but the
movement is low,” she said. “LMIC is predicting that we won’t see these
prices continue through the summer. We expect to see the normal seasonal
decline. In the meantime, I think there will only be hand-to-mouth
The fed cattle markets were heavily influenced by the rise in boxed beef
prices last week, which spent the week above the $160 level, its highest
rise in nearly two years. Packers were willing to return some of their
positive margins to feedlots in exchange for the light supply of market
ready cattle. The predicted drop in quality cattle, as a result of tough
winter feeding conditions, appears to be impacting the current market.
That is translating into a shortage of high grading cattle, causing
packers to hunt for enough supply to meet current market demand for
The Choice cutout last Thursday closed the day at $166.63, down 90 cents
from the prior day but up more than $8 from the previous Thursday.
Select was up 64 cents for the day, ending the day’s trading session at
$156.62. Packers reduced their harvest to just 123,000 head last
Thursday, down 3,000 from the prior week and 1,000 below year ago
levels. For the week through last Thursday, packers had harvested a
total of 492,000 cattle, down from 495,000 for the same period the
previous week, but up from 480,000 a year earlier.
Rosa said another factor in the market run up in recent weeks is the big
drop in carcass weights from historical highs reached last year. She
attributed the decline to a combination of the weather during the past
three months and the high price of corn. Average live weights have
declined from an average of 1,282 lbs. during the same week last year,
to an average of 1,277 last week. Carcass weights have shown an even
greater decline. Last year, carcass weights averaged 783 lbs. Last week,
carcasses averaged just 768 lbs. However, despite lighter weights, kill
levels are running above year ago totals, so actual beef production is
ahead of last year on a week to week comparison. Last week, production
totaled 483.7 million pounds, according to USDA estimates. During the
same week in 2006, production reached just 481 million pounds. The rise
in production over last year is mostly a result of packers trying to
take advantage of currently favorable margins despite lackluster
movement at the wholesale level. That means much of the current
production is being held in cold storage waiting for a future buyer at
what could be a fire-sale price as packers look to ship some product.
Despite the movement of fed cattle prices over $1 last week in the cash
market, the futures markets weren't able to sustain the momentum in the
spot month. Rosa said the contract market had been pushing hard all week
last week to move past $100 in the spot month, however, after topping
out at $101 during last Thursday's session, the contract turned lower
before the bell, closing down 92 points at $99.05. The remaining live
cattle contract months on the Chicago Mercantile Exchange ended the
session last Thursday mixed. June closed 67 points lower at $95.75 and
August shed 37 points to close at $92.80. October and December were both
27 points higher, closing at $96.45 and $96.17 respectively.
Feeder cattle markets showed another sharp increase last week for the
second week in a row. The increase in fed cattle prices, coupled with
the significant increase in the Chicago Mercantile Exchange index from
$100.80 the previous week to $103.92 as of last Thursday, were major
With the fed cattle market on the rise, feedlot owners are able to pay
higher prices for feeder calves to begin filling pens.
“I think what's happened is that the futures market (for fed cattle) has
rallied to a point that feedlots feel very comfortable purchasing feeder
cattle at a higher price,” said Colorado feedlot owner Steve Gabel. “We
can market against a higher contract price if the futures market is
indicative of that.”
The futures price for corn is also a contributing factor as the May
futures corn market price has fallen to $4.05 per bushel. Although
experts say the decrease in corn prices do not necessarily warrant the
significant increase in feeder cattle prices, Gabel says that it is a
factor worth considering.
“I think that feedlot owners are constantly watching their cost
outputs,” he said. “With grain futures decreasing, cattle feeders can
buy the grain today at a lower cost than anytime over the last six to
Another factor that is influencing feeder cattle prices is the
combination of moisture and the increase in temperatures, especially
across the southern states, that has caused pastures to green up. This
has motivated cattle buyers to purchase younger, thin cattle, with
intentions of turning them out to pasture.
In Billings, MT, feeder steers reportedly sold for $4 to $5 higher when
compared to the previous week. Feeder heifers sold for $3 to $5 higher.
Demand last week was good on all weights of feeder cattle. Steers
weighing 550 to 600 lbs. sold steady averaging between $114.75 and $129.
Heifers weighing an average of 560 lbs. sold for an average of $105.25.
Heavier weight steers weighing 700 to 750 lbs. called for $100 to $105
while their heifermates sold for an average of $96.25.
When compared to the previous week, feeder cattle sold steady to $3
higher in Torrington, WY. There were some instances of $4 to $6 higher
on five and six weight heifers. The demand at the auction was moderate
to good with more than 3,500 head sold. Five weight steers averaged $134
and the heavier offerings, steers averaging 726 lbs., sold for $104.71.
Heifers weighing 523 lbs. averaged $116.21 while the heifers weighing in
at 720 lbs. called for $100.85.
Just south in Sterling, CO, with over 1,100 head consigned, feeder
steers and heifers sold $2 to $5 higher than the previous week. Stocker
calves headed to grazing programs sold with a definite higher undertone
noted. Buyer attendance was good with very good demand on all classes of
cattle. Steers averaging 511 lbs. sold for $129 while the heavier
steers, weighing an average of 739 lbs. called for $103.78. Heifers
averaging 543 lbs. sold for $108.38. Eight weight heifers sold for $90.
In Amarillo, TX, feeder steers and heifers under 500 lbs. were steady
while consignments over 500 lbs. were $2 to $3 higher. Demand and
attendance was good in spite of the wet weather conditions. Steers
weighing between 500 and 600 lbs. averaged $112 with prices going as
high as $131. The heavier steers, between 700 and 800 lbs. called for an
average of $104.50. Heifers weighing 500 to 600 lbs. sold for an average
of $109 and seven to eight weight females called for an average of
Oklahoma City, OK, had another large run this week with over 11,000 head
consigned although the quality was not a high as the previous week. In
spite of lower quality consignments, feeder cattle were still steady to
$2 higher with stockers reportedly selling for $2 to $5 higher. Demand
was very good, especially for thin grazing cattle. Oklahoma saw almost
two inches of much needed rain last week and pastures are beginning to
green up nicely. Thin 440 lb. steers sold for as much as $141 while
heifers that were similar in type and kind called for $120.50. Thin
yearlings averaging 619 lbs. sold for an average of $121.97 and their
heifer counterparts called for $105.15. Fleshy, yearling females at the
same weight sold for an average of $94.13.
Further east in Joplin, MO, just under 10,000 head of feeder cattle were
consigned to their weekly sale. Steers under 800 lbs. were $2 to $5
higher while steers over 800 lbs. called for $1 to $3 higher. Heifers
were $1 to $3 higher with the exception of heifers under 400 lbs. which
were $3 to $5 higher. The demand was good. Five to six weight steers
called between $123 and $134. Heifers weighing 300 to 400 lbs. sold for
$122 to $129 while the heavier females, weighing between 700 and 800
lbs. sold for an average of $94.
In Ogallala, NE, feeder calves sold for $2 to $8 higher. Demand was
active on all weights of cattle. The best offering of steers were steers
averaging 677 lbs. and they called for an average of $112.67. Their
heifermates sold for an average of $107.05. Steers weighing an average
of 873 lbs. were also well represented and they sold for $102.62 while
heifers that were of similar weight called for $95.10.
Jamestown, ND, had a relatively large run with over 2,100 consignments.
Feeder steers and heifers sold $1 to $3 higher. There was good demand
for all classes of feeder cattle. The majority of steers averaged
between 600 and 800 lbs. The steers weighing an average of 643 lbs.
called for $116.65 and the heavier consignments, averaging 814 lbs.,
sold for $100.86. The majority of heifers averaged between 585 and 750
lbs. Females weighing an average of 586 lbs. sold for $105.47, and
heifers that weighed 737 lbs. called for an average of $94.93.