Kansas feedlot sales to packers, or closeouts, in December moved higher as expected, continuing the general trend of following the 2016 monthly pace.
The Kansas State Extension Service polls select feedlots around the state each month for data concerning the prior month’s activities, and the Livestock Marketing Information Center extrapolates and graphs the data to reflect an estimated picture of feedlot activities across the state.
After an uncharacteristic downturn in October, feedlot closeouts rebounded in November and continued to move higher in December.
The data showed the average number of head sold to packers in December to be 6,733. This was down 474, or 6.58%, from December 2016’s 7,207 head but up 3,498, or 108.1%, from the 2011-2015 average of 3,235 head.
If Kansas feedlot closeouts follow the 2011-1015 trend, they will increase in January from December, but if they follow last year’s trend, they will decline in January.
Much of what goes into those types of decisions may depend on the weather then, a market analyst said. This year’s winter in the main feeding parts of the country was much drier than last year so growth rates were not hampered as much, allowing for timely or even faster-than-expected sales to packers.
WEIGHTS DOWN
December closeout weights in Kansas declined as they did in 2016 and ended just above the 2011-2015 average. December’s average sales weight for steers was 1,415 pounds, down 13, or 0.91%, from 1,428 a year earlier but five pounds, or 0.35%, above the previous five-year average of 1,410.
If January feeding results follow the average trend, the final weight of steers as they leave the feedlots will decline in January. Using the data from the 2011-2015 average as a guide, the average decline from December to January would be 30 pounds, or 2.17%.
Subtracting 2.17% from December’s weight would yield an expected closeout weight for steers of 1,384 pounds. However, USDA weekly slaughter data for steers in Texas, Oklahoma and New Mexico averaged about 1,262 pounds.
DAYS ON FEED UP
If Kansas slaughter cattle weights exceeded expectations in January it may be because feedlot managers were trying to feed them longer to get them to their full genetic potential for marbling. The average number of days cattle spent on feed in December was flat from November at 167, but this was well above 2016 and the previous five-year average.
December’s 167 days on feed was up 13, or 8.44%, from 154 a year earlier and up 17, or 11.3%, from the average of 150.
Feeding cattle longer to get the extra marbling that packers will pay premiums for often is a losing proposition because they don’t pack on extra marbling as fast as they pack on excess external fat, but it’s the only way to get every animal in the pen up to its full marbling potential.
CATTLE, BEEF RECAP
Fed cattle sold Wednesday on the Livestock Exchange Video Auction at $126 per cwt.
Cash trading last week was at $126 to $127 per cwt on a live basis, down $1. Dressed-basis trade was steady at $204 to $205.
The USDA’s choice cutout Monday was up $0.71 per cwt at $223.23, while select was up $0.20 at $214.84. The choice/select spread widened to $8.39 from $7.88 with 71 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday, was $145.44 per cwt, down $0.59. This compares with Monday’s Mar settlement of $145.15, up $1.47.