Relatively active, and substantially higher fed cattle trade took place
last Wednesday, bucking the trend of late week trade over the previous
few months. Fed cattle prices on approximately 20,000 head were trending
as much as $4-7 higher last week, with prices reportedly in the range of
$98 live basis in the southern Plains, an increase of $4 over the prior
week. In the north and Corn Belt, dressed prices were reportedly as much
as $7 higher in some areas, with prices in a range of $154-155 dressed
in Colorado, Nebraska, Iowa and Minnesota. Last Thursday, in the wake of
$98 trade the day earlier, feedlots were busy raising prices on their
remaining showlists to take advantage of the bullish movement in the
market. Particularly in the southern Plains, feed yards were asking
$99-100 for slaughter-ready cattle.
The prior week’s blizzard conditions in the central and northern Plains,
as well as portions of the Corn Belt, also helped move the market as
conditions prevented the movement of cattle in some areas and caught
some packers short bought. However, much of the upward movement was
spurred by an anticipated shortage of Choice-grading cattle in the weeks
ahead as a result of winter weather conditions in cattle feeding areas
early this year. Although prices are moving higher, grading percentages
remain above early expectations. Last week, USDA reported that 53
percent of all slaughtered cattle were grading Choice, although most
analysts expect that to drop as packers move in to the spring supply.
That expectation has buyers forward purchasing to meet the increased
demand for Choice middle meat products as grilling season gets underway
in the southern states.
The forward purchasing last week was pushing boxed beef prices, for both
Choice and Select product, markedly higher. Last Thursday, Choice
product was trading at $158.34, up $1.19 and Select gained 65 cents to
trade at $147.87. Prices were as much as $7 higher than the previous
week. Those gains were helped by a $4.38 jump in the Choice cutout and a
68 cent rise in Select boxed beef prices last Wednesday. Middle meats,
in particular Choice rib primals, benefitted from the active buying
spree at the wholesale level, gaining $19 per cwt. last Wednesday.
Choice loin primals gained $8 during the day. End meats also got a boost
as buyers look for any available bargains to meet rising demand going
In an effort to capitalize on rising boxed beef prices last week,
packers were ramping up their slaughter volumes. On Thursday last week,
packers harvested an estimated 126,000 head which was 8,000 head more
than the previous week and 4,000 more cattle than the same day last
year. For the week through last Thursday total harvest was 495,000, up
from the prior week’s total of 488,000 and above the same period last
year, which totaled just 484,000 head.
Cow beef cutouts were pressured last week by high slaughter volumes at
cow processors’ last week. The cow beef cutout value declined 66 cents
last Thursday to settle at $109.37. The cow beef cutout value was more
than $2 lower than the previous week and down $3 from last year’s
prices. The 90 percent lean was at $133.80 last week, while the 50
percent trim traded at $44.64, up from $38.42 the previous week.
The sharply higher cash prices gave commodity traders reason to push
live cattle contracts higher on the Chicago Mercantile Exchange (CME) at
the close of the session last Thursday. Prices were 35 points to 247
points higher across the board. Up front contracts received the biggest
boost. April 2007 live cattle contracts were the biggest gainers on the
day, rising 247 points to settle at $101.02. June issues added 192
points, closing at $98.75, and August closed 177 points higher at
Feeder cattle markets last week showed a sharp increase due to several
factors. Many cattle buyers showed some optimism for spring grass and as
a result, feeder cattle prices for thin steers and heifers ready to go
to grass soared.
“The light end of the feeder calves is really up because we have
conditions that are suggesting much of the U.S. will have green grass
going into the spring,” said Jim Robb, director of Livestock Marketing
and Information Center.
In addition to the optimistic outlook cattle buyers have for grass, the
CME cash feeder cattle index rose to $100.48 last Thursday, up from
$98.70 the previous week.
One of the biggest factors that resulted in increased feeder cattle
prices was the huge increase in the cash and futures fed beef market.
Feedlots are receiving more for fed cattle and can afford to pay more
“The futures market for beef is really on fire this week,” said Robb,
last Thursday. “The fed cattle market has really had a spark lit under
it and has pulled the feeder cattle prices up.”
Fed cattle were trading an average of $98 last Thursday with some
averages going as high $99 to $100 in the southeastern region of the
Interestingly, corn prices have only come down a little and have
probably not had much of an effect on the market.
“Corn prices certainly haven’t come down enough to support the feeder
cattle market and that’s a little strange,” he said. “With the corn
coming down just a little, cattle buyers are turning a blind eye and
focusing on the fed cattle increase.”
In auction market trade in Davenport, WA, feeder cattle sold from $1 to
$4 higher. The trade was active with good demand. Five weight feeder
steers called for $116 while their heifermates sold for $95.25. Fleshy,
700 lb. steers sold for $94 and heifers of similar type and weight sold
Torrington, WY, had more cattle consigned last week when compared to the
previous week with 3,100 head. Steers and heifers were steady to $3
higher. The overall quality at the sale was attractive and the demand
was moderate to good. Steers weighing 510 to 540 lbs. sold for an
average of $140.25 and steers weighing 700 to 785 brought an average of
$104.25. Five weight heifers sold for $110 while the heavier
consignments, weighing 715 lbs., sold for $98.50.
Compared to the previous Wednesday, steer calves in La Junta, CO, under
500 lbs. sold for $3 to $5, and in some instances, $8 higher. Steers
over 500 lbs. were steady to $1 higher. Yearling feeder heifers were $2
higher. One lot of fancy 435 lb. steers brought $149. Five weight
heifers sold for $125 to $130 and yearling heifers of replacement
quality sold for an average of $100.
In Amarillo, TX, feeder steers and heifers were mostly steady except
heifers under 600 lbs. which were $1 to $3 higher. Steers averaging 530
lbs. sold for $117 and heavier weights of 713 lbs. sold for $103.
Heifers weighing 539 lbs. sold for $100.75.
The auction market in Oklahoma City, OK, had a large sale last week with
a run of more than 15,500 head compared to 11,685 the previous week.
Feeder steers and heifers were mostly $1 to $3 higher last week. Demand
was reportedly very good for such a large run. Some cattle were in thin
to gaunt condition which was in the buyer’s favor. Demand was very good
for thin cattle suitable for grass. Thin steers weighing 440 lbs.
averaged $140 and thin five weights sold for an average of $134.
Seven-hundred-fifty pound steers, also in thin condition, sold for $106.
Nine weight steers sold for an average of $95.62. Five weight heifers
sold for an average of $107.40 while their value added counterparts
brought $109. Heifers weighing an average of 724 lbs. sold for $93.87.
Just north in Dodge City, KS, feeder steers and heifers weighing between
300 and 600 lbs. were steady to $3 higher. Steers weighing 600 to 650
lbs. steady to $1 higher and seven to ten weights were steady to $2
higher. Heifers weighing between 600 and 750 lbs. were steady to $4
higher and 750 to 900 lb. heifers were steady to $1 higher.
The state of Nebraska boasted over 16,000 head of cattle receipts last
week. Steers trended $1 to $4 higher with some instances of $6 to $7
higher. Heifer offerings traded $2 to $4 higher. Demand in the state was
very good and trading was moderate to active. Weigh-in conditions were
definitely in the buyers' favor after cattle endured extremely frigid
temperatures and adverse weather conditions the previous week. Steers
weighing 500 lbs. sold for $127.56 while a lot of fancy steers at the
same weight brought $139.75 and thin steers averaged $135.26. Steers
averaging 807 lbs. sold for $100.67. Heifers averaging 524 lbs. averaged
$109.89 and thin heifers weighing in at 506 lbs. called for $127. One
lot of value-added heifers weighing 783 lbs. sold for $101.
In Ft. Pierre, SD, feeder steers and heifers calves under 700 lbs. sold
steady to $2 higher with most improvement on cattle suitable for grass.
Feeder steers over 700 lbs. sold $2 to $4 lower. Feeder heifers and
heifer calves sold mostly steady. Demand was called moderate to good.