It was a mixed but mostly down week in the markets last week. Weather dominated the news, both in terms of feeding conditions as well as its impact on beef demand.
Cassie Fish of the Beef Report called the winter’s impact on carcass weights “the real mathematical driver” of the current market.
“[B]ecause of the wet and the cold, [carcass weights] are likely 3 percent below a year ago and ultimately may drop 4 percent below by May 1. That means there are three to four more months of thousands of missing pounds that can’t be captured unless packers up kills.”
“Winter weather is rampaging through the Corn Belt once again this morning,” said Andrew Gottschalk of Hedgers Edge on Tuesday. “Mother Nature continues to drive the bus and prices are on board for the ride.”
Prices on cash fed cattle were down about $1 for the week compared to the week before by close of trade on Thursday, Feb. 14. Just over 10,000 head of negotiated cash fed cattle had been confirmed sold by that point, with prices at $124 for live and $199 for dressed. Expectations were for a steady to higher price on fed cattle, compared to the $125.02 live and $199.95 dressed averages of the week of Feb. 4-8.
The cutout was mixed last week, with the Choice cutout gaining a net 72 cents over the course of the week to close Thursday at $216.07. The Select cutout lost a net 76 cents to close at $210.41.
“Beef is losing its competitive edge to pork,” observed Gottschalk on the cutout-related issue of beef demand.
“February is traditionally a ‘pork’ month, followed quickly (we hope, given the weather this month) by March, which is often the weakest beef demand period of the year. Higher than normal energy bills will also eat into consumers’ disposable income in short order. This will be a concern in the immediate future for meat demand.”
Prices on cash feeder cattle were surprisingly good despite the muddy conditions. The hard conditions have made feeder offerings light fleshed, which usually helps prices. Medium and large #1 steers weighing between 700-800 lbs. sold in the mid- to upper-$140s for the most part, with prices even getting into the $160s.
Colorado: Over 3,000 head of cattle sold las week at the Winter Livestock auction of La Junta. Steer calves sold steady on lights and down $2-4 on midweights, yearlings were steady. Heifer calves were steady while yearlings were steady to down $2. Two lots of benchmark yearling steers sold between $139-147.
Kansas: The Winter Livestock Auction saw steady volumes and a wide range of steer prices. Calves sold $4-5 higher on a limited test, 6-weight yearlings sold steady to down $1, 7- and 8-weights sold steady to down $4, and 9-weights sold steady to up $3. Heifers were steady to $1 on a limited test of calves, plus steady to up $6 on yearlings with preference for 6-weights. Benchmark steers sold between $134-143.50.
Missouri: Light steer calves were steady to up $3 at the Joplin Regional Stockyards, while light heifer calves were the opposite. No quote on yearlings. Demand was called moderate to good despite the wet, muddy conditions. Prices on #1, 7-weight steers ranged between $134.50-146.
Nebraska: Sales were up at the Huss Platte Valley Auction and so were prices on the few comparable sales. Steers and heifers were steady to up $2-3. The weather was credited for the light flesh seen on some of the offering. Two large lots of #1, 7-weight yearling steers sold, averaging $153.61 for the 712-lb. lot and $148.49 for the 780-lb. lot.
New Mexico: The sales volume was up at the Clovis Livestock Auction. Light steer calves were up $1-4 with instances of up $7 on 5-weights; over 600 lbs. and the prices dropped off to a weak steady. Heifers were called weak except for 5-weights, which were up $4. Demand was called very good. Benchmark steers ranged from $135.50-141.50.
Oklahoma: Steers were steady to up $2 and heifers were steady at the OKC West-El Reno sale, and calves were up $3-6 in both sexes. Cattle were muddy from recent rains, but demand was called very good, particularly on the weaned calves suitable for turnout on wheat pasture. Benchmark prices ranged from $137-149.50.
South Dakota: The Hub City Livestock Auction sold 6,000 head last week, up almost half again from the number sold the week before. Steers were all over the map, selling for discounts of $4 on 9-weights and up $6 premiums on 6-weights. Few comparable sales on heifers were called steady. Weather was again credited for the light flesh seen on some of the offering, and demand was called good. Prices on #1, 7-weight steers ranged from $135.25-154.40.
Wyoming: The sales volume was down slightly at the Torrington Livestock Commission, but all reported prices were steady to higher on the mostly calf offering. Steers were majority steady to up $6, with instances of $6-10 higher on steers between 650-750 lbs. Heifers sold steady to $5 higher with preference for lighter heifers. Two lots of benchmark steers sold between $143.50-165.
Near-term futures were mixed but mostly down over the week. The one contract that saw gains over the week was the April feeders, which gained a net 60 cents to settle Thursday at $146.50. Losses in the other near-term contracts ranged from 2 cents in the March feeder contract ($144.08) to $1.25 in the February live contract ($126.13). The April live contract lost 55 cents over the course of the week to settle at $127.38. — Kerry Halladay, WLJ editor
