CATTLE OUTLOOK – Ron Plain and Scott Brown
Ag Economics, MU March 20, 2015
The March cattle on feed report was a bit bullish. It
said that
February placements were down 8.1% compared to a year
ago. February
marketings were down 2.1%. This left 0.5% fewer cattle
on feed at the
start of March than a year ago. The pre-release trade
forecasts were
for placements to be down 7.0%, marketings down 2.6% and the
number on
feed down 0.4% on March 1.
Domestic beef demand was up 16.3% in February, but foreign
demand for
U.S. beef was down 13.6%. U.S. beef demand has been
above the
year-ago level for each of the last 12 months. I would
say the strong
dollar and the labor problems at west coast docks were the
main causes
of the weak export demand during January. The growth in
domestic
demand more than outweighs the decline in export
demand. Through the
first ten full weeks of 2015, year-over-year beef production
was down
2.2%, but the choice beef cutout value was up 10.8% and fed
cattle
prices were up 31.3%.
This morning the choice boxed beef cutout value was
$244.38/cwt, up 31
cents from the previous Friday and up $3.55 from a year
ago. The
select carcass cutout was $244.56/cwt this morning, down 3
cents from
last week, but up 61 cents from a year ago. The
choice-select price
spread has been very tight in recent days.
Fed cattle prices were mixed this week on light sales
volume. Through
Thursday, the 5-area average price for slaughter steers sold
on a live
weight basis was $161.50/cwt, up 72 cents from last week’s
average and
up $11.40 from a year ago. The 5 area average dressed
price for
steers was $255.28/cwt, down $3.81 for the week, but up
$15.17
compared to a year ago.
Cattle slaughter this week totaled 518,000 head, down 1.1%
from the
week before and down 10.5% from the same week last year.
The average steer dressed weight for the week ending on
March 7 was
876 pounds, up 1 pound from the week before and up 18 pounds
compared
to the same week last year. Steer weights have been
above year-ago
each week since June 14, 2014.
Feeder cattle prices at Oklahoma City were as much as $7
higher on
calves, but $1 to $3 lower on heavy weight feeders. Prices
for medium
and large frame #1 steers by weight group were: 400-450#
$306-$313,
450-500# $285-$303, 500-550# $275-$295, 550-600# $266-$282,
600-650#
$246-$266, 650-700# $236-$250, 700-750# $207.50-$235,
750-800#
$202.25-$217.50, 800-900# $186-$204, 900-1000#,
$173-$191/cwt.
The April live cattle futures contract settled at
$158.35/cwt today,
up $4.08 for the week. June fed cattle settled at
$150.47/cwt, up
$5.20 from the previous Friday. August fed cattle
gained $4.48 this
week to settle at $148.10/cwt.
The March feeder cattle contract ended the week at $214.87/cwt,
up
$1.75 for the week. April feeders settled at
$216.20/cwt which is
$4.98 higher than the Friday before. The May contract
ended the week
at $215.40/cwt.
