29 June 2009

3 minute read

North America

Ron Plain

The Cattle on Feed report came in a little more positive then the trade estimates. The number on feed June 1 was down 3.8 percent, the trade estimate was for a decline of 3.3 percent. Placed on feed during May was down 13.8 percent, the trade estimate was for a decline of 12.3 percent. Fed marketings during May were down 8.8 percent, the trade estimate was for a decline of 9.1 percent from a year earlier.

The weights of cattle placed on feed during May were down from 12 months earlier. The number placed weighing less than 600 pounds was up 16.2 percent, the number placed weighing 600-699 pounds was down 12.9 percent, the number placed weighing 700-799 pounds was down 23.4 percent, and the number placed weighing 800-pounds-or-more was down 21.7 percent. These lighter-weight placements are interesting. Does it mean we do not have as many feeder cattle as the January 1 inventory indicated?

The futures market opened with small gains in the nearby contracts but down some for the distant contracts. The four nearby contracts closed Monday $0.17-0.77 higher. The remainder of the traded contracts were down a little.

Cold storage stocks of beef were up one percent from the end of April but down one percent from the end of May in 2008. Cold storage stocks of pork were down five percent from the end of April but up one percent from the end of May in 2008. Cold storage stocks of chicken at the end of May were down three percent from April 30 and down 15 percent from the end of May last year.

Cow slaughter for the year through the week ending June 6 was up 1.8 percent, dairy cow slaughter for this period was up 13.5 percent and beef cow slaughter was down 6.9 percent from the same period in 2008.

For the four-week period ending June 6 this year, total cow slaughter was down one percent, dairy cow slaughter was up 21.3 percent, but beef cow slaughter was down 14.4 percent from 12 months earlier.

We are reducing the size of the dairy herd but may have stopped the decline in the beef cow herd. The odds are low that the beef cow herd has been reduced enough to bring profitability to the beef producers.

The weighted average price for fed steers through Thursday for the five major feeding areas at $80.74 per cwt were down $0.45 per cwt from a week earlier. The weighted average negotiated carcass price for the week through Thursday at $129.61 per cwt was down $0.95 per cwt from seven days earlier.

Feeder steers and heifer at Oklahoma City were steady to $3 per cwt higher, and steer and heifer calves were not well tested with few sales steady with last week.

The price range by weight groups for medium- and large-frame Number One steers at Oklahoma City this week were: 450-500 pounds $112.50-115 per cwt, 500-600 pounds $105.50-112.75 per cwt, 600-650-pound calves $93-99 per cwt, 600-700-pound yearlings $99-106.25 per cwt, 700-800 pounds $97.25-104 per cwt and 800-1,000 pounds $88-98.50 per cwt.

Slaughter this week under Federal Inspection at 673 thousand head was down 5.6 percent from a year earlier.

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