Cattle Outlook

Ron Plain and Scott Brown
University of Missouri
September 26, 2014

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USDA's September Cold Storage report said there were 343.7 million pounds of beef in cold storage at the end of August. That is 6.2% less than the month before and 20.1% less than a year earlier. This is the lowest frozen beef stocks for any month since July 2005. Seasonally, beef stocks tend to increase from August to year's end.

The meat supply is very tight. Compared to August 31, 2013, pork in cold storage was down 0.5%, chicken was down 13.1% and frozen turkey was down 15.0%.

The Commerce Department revised upward their estimate of second quarter growth. They now say the nation's GDP increased by 4.6% in April-June. Faster growth is good news for meat demand.

Boxed beef cutout value was lower this week. The cutout value for choice carcasses this morning was $238.19/cwt, down $6.35 from last Friday, but $45.74 higher than a year ago. The select cutout was $225.44/cwt on today's morning report, down $5.20 for the week, but $49.33 higher than a year earlier.

Fed cattle prices declined this week on light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis were $153.12/cwt, down 63 cents from last week's average, but up $28.81 compared to a year ago. The 5 area average dressed price for steers lost $3.23 this week to $242.00/cwt, which is $47.05 higher than last year.

Cattle slaughter totaled 572 thousand head, up 0.2% from the week before, but 8.5% fewer than the same week last year. This was the 30th consecutive week that cattle slaughter has been below the year-ago level.

The average dressed weight for steers slaughtered the week ending September 13 was 889 pounds, unchanged from the week before and 22 pounds heavier than the same week last year. This was the 13th consecutive week with weights above year-ago and the biggest year-over-year increase in steer carcass weights since the first week of 2013.

Feeder cattle prices were mostly steady on heavier weights and lower on calves this week at Oklahoma City. This week's price ranges for medium and large frame #1 steers by weight group were: 400-450# $280-$305, 450-500# $262-$313, 500-550# $250-$270, 550-600# $225-$260, 600-650# $230-$260, 650-700# $223-$245, 700-750# $217.50-$247.50, 750-800# $210.50-$238.50, 800-900# $211-$229, and 900-1000# $200.50-$214.50/cwt.

The October live cattle futures contract closed at $158.45/cwt today, up $2.83 on the week. December fed cattle settled at $162.10/cwt, up $3.40 for the week. The February contract ended the week at $162.00/cwt.

The October feeder cattle contract gained $4.38 this week to end at $233.10/cwt. November feeders closed at $231.60/cwt, up $5.28 for the week. The January feeder cattle contract ended the week at $226.17/cwt.

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