June’s sales to beef packers from Kansas feedlots declined counter seasonally from May and came to a point that was lower than last year and the 2014-2018 average for the month.
The information came from a Kansas State University Extension Service survey of selected feedlots across the state. This data then was compiled and extrapolated by the Livestock Marketing Information Center in Denver to give a good estimate of an average feedlot’s activity for the month. The information then is published on the LMIC website.
DOWNTURN NOT EXPLAINED
The LMIC does not give any explanation for the unusual downturn in feedlot sales to packers, known as marketings. A market analyst said it may be because feedlots were getting caught up from being locked out of many marketing opportunities in April and May. Packers were thought to be making large profits on every animal slaughtered and would be unlikely to hold back on chain speeds for monetary reasons. Illness among their employees could limit chain speeds, but any shortfall in production could be made up with Saturday kills.
The K-State data shows the average Kansas feedlot sold 4,323 head of fed steers to packers in June, down 334, or 7.17%, from 4,657 head in May. June’s sales also were 721 head, or 14.3%, below the 5,044 head in June 2019 and 719, or 14.3%, below the previous five-year average of 5,042.
Should July marketings follow last year and the previous five-year average, they will have declined in July as well, the data shows. August marketings can be less precise, generally easing lower.
A strong seasonal move lower comes in September.
FINAL WEIGHTS HOLD HIGHER
Final weights of slaughter steers from Kansas feedlots in June continued to hold well above last year and the 2014-2018 average. They declined a bit from May, but the seasonalities for the month aren’t very strong.
The average fed steer going to slaughter from Kansas feedlots in June weighed 1,425 pounds, down from 1,427 in May but up 58, or 4.24%, from last year’s 1,367 and up 47.8, or 3.47%, from the previous five-year average of 1,377.2.
The seasonal tendencies for fed cattle weights as they exit Kansas feedlots tend to rise in July and keep rising into the annual peak in November. Last year, the marketing weights of steers coming out of Kansas feedlots rose from the March low through December with an uncharacteristic dip in September.
Another reason June marketings went down from Kansas feedlots could be that feeders were getting tired of losing so much money on every head sold that they just dug in, the analyst said.
Average days on feed for June marketings declined a bit from May but held well above last year and the 2014-2018 average.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains this week at $103 per cwt on a live basis, steady to up $4 from last week. Dressed-basis trading was done last week at $163 to $164 per cwt, up $3 to $4.
The USDA choice cutout Tuesday was up $0.88 per cwt at $208.08, while select was up $1.09 at $195.02. The choice/select spread narrowed to $13.06 from $13.27 with 108 loads of fabricated product sold into the spot market.
Six steer contracts were tendered for delivery against the Aug live cattle futures contract at zero Tuesday. Six heifer contracts were retendered at 1 and six heifer contracts were reclaimed at 1.
The CME Feeder Cattle index for the seven days ended Monday was $142.33 per cwt, down $0.28. This compares with Tuesday’s Aug contract settlement of $144.50, up $0.92.