A Reuters story relayed on Urner Barry’s Foodmarket website, said the return of drought conditions to many parts of the contiguous 48 states is delaying cattle herd rebuilding. A look at the National Weather Service’s weekly Drought Monitor would seem to back up the principle behind such a conclusion.
TIGHT SUPPLIES SQUEEZE BUYERS
The cattle herd has been shrinking for the last few years as extended drought reduced pasture and range forage, and the tightening supplies of feeder and fed cattle are pinching cattle buyers. Feeder cattle and fed cattle prices are up as a result, and they are projected to go even higher as supplies tighten further.
Beef imports also were projected to increase as cow slaughter numbers declined after years of extra culling.
NWS DROUGHT OBSERVATIONS
Over the week ended last Tuesday, Nov. 5, various weather systems tracked over the Southern Plains and into the Midwest, bringing much-needed precipitation, the NWS said. Some areas of Arkansas and Missouri reported more than 10 inches of rain for the week. The active pattern also continued over the Pacific Northwest, with coastal areas and inland recording two to four inches of rain that helped to alleviate dryness.
Temperatures over the West were below-normal for the week, by as much as six to nine degrees in parts of Nevada, Utah and Arizona, the NWS said. The rest of the country had warmer-than-normal temperatures, especially in Texas and into Louisiana, Mississippi, Arkansas and Alabama, where they were nine to 12 degrees above normal.
Many areas that received rain during the period had the rains come on the cusp of record-setting dryness in October, but many records were still set for areas that didn’t receive rain at the end of October and early November, the NWS said.
WESTERN PRECIPITATION SCATTERED
Precipitation was scattered over much of the West, with the greatest rain over the Pacific Northwest, where 200% of normal rain was recorded for the week in much of Oregon and Washington, the NWS said.
Cooler-than-normal temperatures dominated with many areas of Nevada, Utah, Arizona and into western Wyoming six to nine degrees below normal, the NWS said. Dryness continued to dominate much of Montana with abnormally dry conditions expanding to fill the rest of the state and moderate and severe drought expanding in the west.
Abnormally dry conditions spread to the rest of central Utah while moderate drought and abnormally dry conditions improved over much of western Oregon and Washington. Some improvements were made over eastern New Mexico.
Significant rain and snow fell over much of Kansas, southeast Nebraska, southeast Colorado.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.72 per cwt to $193.00, compared with last week’s range of $187.12 to $197.20 per cwt. FOB dressed steers, and heifers went for $297.11 per cwt to $299.32, compared with $297.87 to $302.65.
The USDA choice cutout Tuesday was up $0.06 per cwt at $308.27 while select was down $1.92 at $279.92. The choice/select spread widened to $28.35 from $26.37 with 107 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $335.59 per cwt, and 50% beef was $78.19.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.44 to $1.55 a bushel over the Dec corn contract and unchanged in Kansas at $0.25 over Dec, which settled at $4.28 1/2 a bushel, down $0.01 1/2.
The CME Feeder Cattle Index for the seven days ended Monday was $249.64 per cwt, down $0.19. This compares with Tuesday’s Nov contract settlement of $246.82, up $0.67.