Ron Plain and Scott Brown
Ag Economics, MU
December 2, 2016
Fed cattle prices were higher this week on very heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $114.14/cwt, up $3.08 from last week's average, but down $9.27 from a year ago. The 5-area dressed steer price averaged $174.95/cwt, up $1.96 from the week before, but down $19.49 from a year ago. These are the highest fed cattle prices since late August.
Beef cutout value was higher this week. This morning, the choice boxed beef cutout value was $190.29/cwt, up $2.50 from the previous Friday, but $13.08 lower than a year ago. The select carcass cutout this morning was $173.59/cwt, up $2.32 from last week.
There were 532 million pounds of beef in cold storage at the end of October. That was 2.6% more than the month before and 4.6% more than a year ago. Stocks of frozen pork were down 0.9% and chicken stocks were down 9.9% compared to October 31, 2015.
In good news for meat demand, the latest jobs report says the economy added 178,000 jobs during November. That is in line with the recent trend and helped push the unemployment rate down to 4.6%, the lowest since August 2007. The bad news in the report is that average hourly wages declined three cents in November to $25.89/hour.
This week's cattle slaughter totaled 616,000 head, up 11.8% from last week (which was low because of Thanksgiving) and up 10.8% from a year ago. Year-to-date cattle slaughter is up 5.6% and beef production is up 5.7% compared to the same period last year.
The average steer dressed weight for the week ending on November 19 was 918 pounds, unchanged from the week before, down 7 pounds from a year ago, and below the year-ago level for the 29th consecutive week.
Cattle prices were steady to higher this week at the Oklahoma City auction. Feeder steer prices were $1 to $4 higher and stocker calves were steady compared to the week before Thanksgiving week. Prices for medium and large frame #1 steers by weight group were: 400-450# $165-181, 450-500# $160-$174, 500-550# $139-$166, 550-600# $136-$157, 600-650# $127-$143, 650-700# $123-$138, 700-750# $129-$137.35, 750-800# $121-$139, 800-900# $125.50-$138, and 900-1000# $122-$131.50/cwt.
Cattle futures were lower this week. The December live cattle futures contract settled at $108.22/cwt today, down $2.53 for the week. February live cattle lost $3.33 this week and closed at $108.87/cwt. The April contract settled at $109.05.
The January feeder cattle futures contract ended the week at $124.60/cwt, down $2.60 from a week earlier. March feeder cattle lost $1.83 this week to settle at $121.52/cwt. April feeder cattle settled at $121.25/cwt.
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