Fed cattle prices finally surged last week to $108-110 per cwt in many cash markets, and to David Anderson, professor and extension economist at Texas A&M University, the move is overdue.
Writing for the Livestock Marketing Information Center’s weekly In The Cattle Markets, Anderson said, high beef live-to-cutout spreads over the last couple of months, seasonal trends and seemingly overdone price declines all indicated prices should be higher.
The wholesale beef market, as measured by the USDA’s choice beef cutout was higher as well, he said. Three weeks ago, the weekly choice cutout was up almost $5 per cwt to $187.03. (However, since then, it has fallen back to $182.98 in two weeks.)
The primal rib cut led the way, climbing to $368.39, its highest value since June 14, Anderson said.
The primal loin value fared pretty well, too, although monthly prices did decline from July on. Other cuts, like the chuck declined into September but seemed to catch mild support in October.
Brisket values also were off in October from last year, USDA records showed. Chucks and rounds also were weaker but not as much.
That was all in the face of rising cattle slaughter. November cattle slaughter was estimated to be 9% above November a year ago, using the USDA’s estimated daily slaughter report.
FEEDER CATTLE PRICES ALSO UP
Feeder cattle and calf prices climbed along with the fed cattle market, Anderson said.
While the calf market has had a very small to nonexistent price slide in recent months, he said. This surge in prices has started to widen out the slide.
Those who held back their calves to keep them over the winter or bought stockers might pay very close attention to these calf market developments, Anderson said.
The widening slide might provide some new opportunities. It’s likely to remain important to plan now for marketing feeder cattle in the spring, Anderson said.
USDA released the October Cattle on Feed Report Nov. 18. The combination of marketings increasing 4.6% over a year ago to 1.705 million from 1.630 million, and placements declining 5% to 2.171 million from 2.286 million resulted in the number of cattle on feed being 1.3% lower than last year’s 10.809 million at 10.665 million.
Feeding losses, calf prices signaling holding calves on winter pastures and fewer feeder cattle from Mexico all contributed to fewer placements, he said. Certainly fewer cattle on feed does imply some moderating of slaughter in future months as those cattle reach maturity.
Given the holiday season is upon us, it’s worth remembering, as beef lovers, a standing rib roast makes a great alternative to that turkey! (Ok, maybe one turkey is fine as a bow to tradition!)
CASH CATTLE MARKETS QUIET
Live-basis cash cattle trading Tuesday remained quiet after trading last week up $4 per cwt from the previous week at $109 to $113, mostly $112. Dressed-basis prices last week were steady to up $2 at $170.
Cattle sold in the online Superior Auction last week at an average of $109.14 per cwt live, up from $106.79, and traders are awaiting the results of today’s auction.
The USDA’s choice cutout Tuesday was $1.56 per cwt higher at $189.56, while select was up $0.13 at $172.88. The choice/select spread widened to $16.68 from $15.25 with 86 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Monday was $130.18 per cwt, up $0.83. This compares with Tuesday’s Jan settlement at $126.97, up $0.17.