Kansas Feedlot Closeouts Rebound In April

After a counter-seasonal drop in March, the number of cattle feedlots sold to packers rebounded in April, according to data collected by the Kansas State University Extension Service and compiled by the Livestock Marketing Information Center.

The K-State Extension Service canvases a select group of feedlots around the state, and the LMIC then extrapolates the data to arrive at a picture of the average actions of all feedlots in the state.

 

CLOSEOUTS BACK UP

 

In the case of the number of cattle sold to packers, or closed out of the feedlots, in April, the average was 3,523 head, up 883, or 33.4%, from March’s unusually low 2,640.  April’s closeouts also were down 620, or 15.0%, from April 2018’s 4,143 head and down 198, or 5.32%, from the 2013-17 average of 3,721.

May’s closeout trends can go up or down, there is only a small seasonal tendency for an increase, and they declined in May last year.  One analyst said that with calculated packer margins very positive currently, packers could be expected to kill as many as possible to take advantage of current profits, which likely would push May closeouts higher than in April.

And, while calculated unhedged margins for feedlots are declining with rising feed costs, most were thought to be in the black as of last week, the analyst said.  As a result, feedlots could be expected to push cattle out the gate as soon as packers will take them to minimize the feed bill on any particular set of cattle the packers will buy, also pushing May closeouts higher.

 

CATTLE SET BACK BY WINTER

 

The effect of harsh winter weather on feedlot cattle is debated every winter, and often is hard to see outside of the data from a particular feedlot, an analyst said.  However, the effects of the winter’s very cold temperatures and wet conditions on those cattle that were sent to slaughter in April can be seen in the Kansas feedlot statistics for March and April.

In short, average slaughter weights were down while the number of days they spent on feed were up.

The average weight of fed steers leaving Kansas feedlots for the packing plant in April was 1,351 pounds.  This was up seven pounds, or 0.52%, from March’s 1,344 pounds but five pounds, or 0.37%, below the 1,356 pounds of a year earlier and the previous five-year average.

That’s not much, but the time it took for them to reach those weights was up.  The average time it took for April’s fed cattle closeouts to reach acceptable weights and fatness was 190 days, up seven, or 3.83%, from 183 in March.  It also was up eight days, or 4.40%, from 182 a year earlier and up 21.8, or 13.0%, from the 2013-2017 average of 168.2.

Heifers showed similar trends.  Final closeout weights were down, even as the number of days on feed rose.

 

CATTLE, BEEF RECAP

 

Cash cattle trading was reported in the Plains this week at $112 to $115 per cwt on a live basis, down $3 from last week.  No dressed-basis trade was reported but took place last week at $186 per cwt, steady to up $1.

The USDA choice cutout Thursday was up $0.14 per cwt at $222.25, while select was off $0.02 at $207.16.  The choice/select spread widened to $15.09 from $14.93 with 102 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $131.73 per cwt, down $0.15 from the previous day.  This compares with Thursday’s Aug contract settlement of $139.27, down $0.17.