Cattle Outlook

Ron Plain and Scott Brown
University of Missouri
October 24, 2014

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Despite lower cutout values, fed cattle prices set a new record high this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $168.67/cwt, up $4.93 from last week's average and up $36.38 from a year ago. The 5 area average dressed price for steers gained $6.05 this week to $263.80/cwt. A year ago the dressed price averaged $207.80/cwt.

Boxed beef cutout values were lower this week. The cutout value for choice carcasses this morning was $247.04/cwt, down $1.87 from last Friday but up $46.85 from a year ago. The select cutout was $232.44/cwt on today's morning report, down $2.09 for the week, but $47.26 higher than last year.

The World Trade Organization has once again ruled that the U.S. Country of Origin Labeling (COOL) rules for livestock are a violation of our international trade agreements. It appears the U.S. has three options: 1. stall for time by appealing the WTO decision, 2. live with Canada and Mexico imposing tariffs on goods imported from the U.S. and 3. rewrite our COOL rules for livestock. The last time the WTO ruled against the U.S. on COOL we chose options 1 then 3. (Obviously our COOL rewrite did not satisfy Canada, Mexico or the WTO.) I predict the same course of action this time.

Retail prices of choice beef were record high in September for the eighth consecutive month. Choice beef average $6.256 per pound last month. That is up 1.6 cents from the month before and up 96.2 cents from September 2013. The average price of all fresh beef in grocery stores was a record $5.924/lb in September.

The 5 area average price for slaughter steers was $161.50/cwt in September. That is up $4.40 from the month before, up $36.30 from a year ago and up $3.80 from the July record.

Stocks of beef in cold storage were down 16.1% on September 30 compared to a year ago. Frozen stocks of pork, chicken and turkey were also less than a year ago.

This week's cattle slaughter totaled 576 thousand head, up 1.9% from the week before, but 6.9% lower than the same week last year. The average dressed weight for steers slaughtered the week ending October 11 was a record 899 pounds, up 3 pounds from the week before and 29 pounds heavier than the same week last year.

Feeder cattle prices were $4 lower to $5 higher this week at Oklahoma City. This week's price ranges for medium and large frame #1 steers by weight group were: 400-450# $305-$319.50, 450-500# $287-$316, 500-550# $260-$306, 550-600# $264-$285, 600-650# $231.50-$260, 650-700# $227.50-$249, 700-750# $221.50-$240.50, 750-800# $220-$245.50, 800-900# $210.50-$234, and 900-1000# $205.50-$221.50/cwt.

The October live cattle futures contract closed at $168.25/cwt today, up $3.20 for the week. December fed cattle settled at $166.90/cwt, up $1.85 for the week. The October feeder cattle contract lost 55 cents week to end at $237.90/cwt.

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