Cattle Outlook

Ron Plain and Scott Brown
University of Missouri
January 23, 2015

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For several weeks there has been a slowdown in activity at west coast seaports because of a dispute between the Pacific Maritime Association and the International Longshoreman and Warehouse Union. This is causing serious problems for U.S. meat exporters and has the potential to become a crisis. Containers of meat destined for export are piling up and growing old at west coast docks. Roughly 10% of U.S. beef production, 22% of pork and 20% of chicken are exported each month, with most going out from the west coast.

There were 441 million pounds of beef in cold storage at the end of December. That was up 10.9% from the month before, but down 0.4% compared to a year earlier.

Commercial cattle slaughter in 2014 totaled 30.1706 million head, down 7.1% from the year before and the lowest for any year since 1963.

Boxed beef prices dropped sharply this week. This morning the boxed beef cutout value for choice carcasses was $253.88/cwt, down $7.25 from the previous Friday, but up $15.61 from a year ago. The select carcass cutout was $249.43/cwt this morning, down $2.77 from last week, but up $12.21 from a year ago.

Fed cattle prices were sharply lower this week on moderate sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $159.51/cwt, down $3.63 from last week's average, but up $11.26 from a year ago. The 5 area average dressed price for steers was $256.03/cwt, down $7.47 for the week, but up $17.17 from this week last year.

Cattle slaughter this week totaled 576,000 head, up 5.5% from the week before, but down 4.0% from the comparable week last year. This was the biggest cattle slaughter total since the week ending on October 25.

The average steer dressed weight for the week ending on January 10 was 889 pounds, down 8 pounds from the week before, but up 18 pounds compared to the same week last year. This is the closest steer weights have been to a year ago since the week ending on September 6.

Feeder cattle prices at Oklahoma City were $5 to $15 lower for the second week in a row. Prices for medium and large frame #1 steers by weight group were: 400-450# $321-$339, 450-500# $295-$319.50, 500-550# $269-$296.50, 550-600# $247.50-$278, 600-650# $227-$258, 650-700# $215-$242, 700-750# $207-$225, 750-800# $206.50-$218.50, 800-900# $198-$213, 900-1000#, $191-$205/cwt.

The February live cattle futures contract today settled at $150.35, down $4.10 for the week. April fed cattle settled at $148.80/cwt, down $4.15 from the previous Friday. June fed cattle lost $3.70 this week to settle at $142.77/cwt.

The January feeder cattle contract ended the week at $213.70/cwt, down 40 cents for the week. The March feeder contract lost $3.03 this week to settle at $201.82/cwt.

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