4 September 2009

3 minute read

North America

Ron Plain

The 1 August Cattle on Feed report was a little more bearish than the trade estimates. The on-feed number was down 2.3 per cent, the trade estimate was for a 3.6 per cent decline. Placements on feed during July were up 12.5 per cent, the trade estimate was for a 6.5 per cent increase. Fed marketings during July were down 5.4 per cent, the trade estimate was for a 4.8 per cent decline.

At the close of the futures market on Tuesday all live cattle contracts were up a little from $0.15-0.65 per cwt. So was the report bearish?

The cattle placed on feed during July were lighter weight than a year earlier. Seventy per cent of the increased placements weighed less than 700 pounds, and 46 per cent of the increased placements weighed under 600 pounds.

The cattle inventory for 1 July in Canada showed the total number of cattle down 1.1 per cent, cows and heifers that have calved down 1.3 per cent, and heifers held for beef cow replacement down 3.3 per cent.

The total number of cattle and calves on 1 July in the United States and Canada was down 1.6 per cent, and the number of cows and heifers that have calved was down 1.8 per cent.

The odds are high that the cattle inventory will continue to decline at a slow rate for the last half of 2009 in North America.

Demand for beef at the consumer level for January-July was down 1.5 per cent from a year earlier. Pork demand at the consumer level was up 4.0 per cent for January-July, broiler demand was down 3.5 per cent and turkey demand was up 4.5 perc ent.

Live fed cattle demand for January-July was down 8.1 percent from 12 months earlier.

Compared to last week feeder cattle at Oklahoma City were steady to $1.00 per cwt lower. Steer and heifer calves were steady.

The prices by weight groups for medium- and large-frame Number One steers were: 450-500 pounds $111-115.50 per cwt, 500-600 pounds $105-113.25 per cwt, 600-700-pound calves $94-100 per cwt, 600-700-pound yearlings $100.50-108.25 per cwt, 700-800 pounds $99.25-103.75 and 800-1,000 pounds $88.25-99.25 per cwt.

Wholesale beef prices Friday morning showed Choice beef at $144.02 per cwt, up $1.77 per cwt from a week earlier. Select beef at $136.13 per cwt was up $0.90 per cwt from seven days earlier.

There is a quite good relationship between cow slaughter and change in herd size. Beef cow slaughter suggests the beef cow herd on January 1, 2010, will be 1-1.5 per cent below a year earlier. Dairy cow slaughter indicates the dairy cow herd will be down between 1.5 and 2.0 per cent. Both herds need additional reductions to get milk and beef prices in line with costs.

Fed cattle prices through Thursday showed the weighted average for the five-market area at $84.43 per cwt, up $2.35 per cwt from a week earlier. The weighted average negotiated carcass price for the five-market area was $131.67 per cwt, up $1.00 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 654,000 head, down 3.3 per cent from 12 months earlier.

TheCattleSite News Desk