As the price of feeder cattle climbs and the price of fed cattle softens, it’s hard to imagine how the calves will break even for those planning to put them on feed, but there are times when they do.
Feeder steers and heifers at the Oklahoma City Stockyards Monday were steady to $3.00 per cwt higher with medium and large No. 1 feeder steer calves weighing 700 to 800 pounds sold at $217.50 to $230.00 per cwt. Unless these calves gain at an unusually fast pace or fit into some type of premium program, they likely will be money losers if the April futures contract is any indication of the final cash price.
But the Hanford, CA, Overland Stock Yard held its video auction for Holstein steers and heifers Thursday, and some of these calves have a better chance of panning out for their buyers.
A load of 375-pound Texas steers for October delivery, for instance, sold at $259.00 per cwt, and a quick, pocket calculator, comparison showed the buyer might have paid up to $314.31 to break even.
And a load of 400-pound California steers for October delivery sold at $254.00 per cwt, and that same pocket-calculator comparison showed the buyer might have paid up to $299.98 to break even.
The CME Feeder Cattle Index for the seven days ended Wednesday was $230.33 per cwt, up $0.09 from Tuesday, and feeder cattle futures set a new contract high in Thursday’s two-sided trade. Trading Thursday was called sluggish as traders chafe at record-high prices amid tight cash supplies.
Seasonally, Southern Plains weekly feeder cattle prices tend to decline slightly beginning in July, rebounding slightly in October, all the while holding within a narrow range. However, last year, prices for southern Plains 700- to 800-pound No. 1 feeder steers rose from May until late October when they declined slightly.
This year, Southern Plains feeder steers began rising in February but showed increasing volatility, or trader uncertainty, beginning in June. Since then, volatility has accelerated, but so have prices, hitting a new record last week at $233.94 per cwt.
To many, the feeder cattle market needs to take a breather from its record highs, but just as many believe prices will be forced even higher by tight supplies.
BEEF EXPORT SALES BEHIND LAST YEAR
Weekly beef net export sales for the week ended Sep. 18 came in at 12,200 tonnes, down 22% from the previous week, and were down 3% from the prior four-week average, according to the USDA’s Foreign Agricultural Service. Increases were reported for Hong Kong, which purchased 3,200 tonnes; South Korea, which bought 3,100 tonnes; Mexico, which purchased 2,100 tonnes; Japan at 1,300 tonnes, and Canada at 1,000 tonnes.
Beef exports of 13,400 tonnes were down 10% from the previous week but were up 1% from the prior 4-week average, FAS reported. The primary destinations were Japan at 3,700 tonnes, Hong Kong at 2,700 tonnes, South Korea at 2,400 tonnes, Mexico at 2,000 tonnes and Canada at 1,100 tonnes.
CASH TRADE REMAINS QUIET
No Plains area cash cattle trade was reported through Thursday with scant bids of $153 on a live basis and around $240 to $242 on a dressed basis. Asking prices held at $155 to $156 live and around $247 dressed. Cattle traded last week at mostly $159 live and $244 to $245 dressed.
A light trade was reported in Iowa Thursday at $153 to a major packer, but little else.
USDA’s choice cutout value Thursday dipped a scant $0.02 per cwt to $239.11. This was down $5.77, or 2.36%, from $244.88 a week earlier.
The USDA’s select cutout value dropped $0.97 per cwt to $225.34. This was $6.75, or 2.91%, below last week’s $232.09.