A monthly Kansas State University survey of the state’s feedlots Monday confirmed what traders and USDA reports have said – that sales of fed cattle to packers are declining but that weights are rising.
What the other reports don’t say, however, is that declining marketings are seasonal. It’s just that the slide in sales is taking place about a month earlier than normal.
Other reports show a nationwide trend toward heavier slaughter weights, but in Kansas, slaughter steer weights are very close to last year, and heifer weights are below a year ago. However, both are well above the previous five-year average.
The average number of steers marketed for slaughter by Kansas feed yards in August was 2,903 head, 195, or 7.20%, more than August of 2013, but 634, or 17.9%, fewer than the average. A graph of the data compiled by the Livestock Marketing Information Center shows Kansas feedlot steer marketings normally have a slow crown over the summer months, peaking in July.
That July peak was especially evident last year when average feedlot marketings topped out at 4,215, well above the June and August numbers of 3,680 and 2,708, respectively.
This year, the peak came in June when feedlots sold an average of 4,133 head.
DAYS ON FEED SHOWS MARKED DIVERGENCE
Yet while the number of Kansas steer marketings declined in August, the time those cattle spent on feed actually increased, a marked divergence from last year, although not so different from the five-year average.
K-State data show the average number of days their August marketings spent on feed at 162, up one from July and up 21 from a year earlier when individual feedlot marketings showed a summer peak in July.
But the data also show a historic trend toward a July-to-August rise in the number of days cattle are kept on feed with a significant decline into November.
SLAUGHTER STEER PRICES STILL IN SIDEWAYS PATTERN
Slaughter steer prices in the Southern Plains last week faded, albeit in a very thinly traded market that some said had insufficient volume to establish a trend.
The USDA said the weighted average price in Nebraska, at $246.19 on a dressed basis was $1.44 higher than the previous week. It quoted live sales in Kansas at $158 on a live basis, down $1.
Those prices still are above the recent swing low of $152.53 set the third week of August.
Typically, the market tends to flatten and trade within a narrow range into December beginning in August. The current action appears to be following the same trend, although with much more volatility.
Boxed-beef prices strengthened Monday, with the USDA reporting its choice beef cutout value at $238.02 per cwt, up $0.36, and its select cutout at $226.83, up $1.35.
However, those prices remain below a week earlier amid reports that beef demand really hasn’t recovered from its September slump. A week earlier, choice boxed beef was reported at $243.02 and select at $228.47.
The choice select spread also narrowed on Monday and showed less robust widening last week since it bounced seasonally in early August. USDA data show the seasonal peak occurs the last week of November, but the market is following last year when the peak came in late September.
Consumer beef demand has yet to see the full effect of summer wholesale price gains because of a natural market lag effect. Coming months will test buyer resolve to eat beef as pork and poultry production rise.