Q1 Placements Appear To Be A Month Late

First-quarter feedlot placements that were supposed to swell the ranks of summer marketings for slaughter may just now be filling that role – a month later than expected, and last week’s price dip may be followed by a few more until supplies tighten again in the fall.

Kansas State University feedlot data show steers are coming to market heavier than last year and the five-year average as they spend more time on feed.

However, feedlots likely are not behind on their marketing schedules, marketing more steers per month than last year since March and more than the average since about April 1.  In June, surveyed Kansas feedlots moved an average of 4,133 head to slaughter, 12.33% more than last year’s 3,680, and 16.29% more than the average 3,554.

Marketed cattle from Kansas feedlots spent 164 days on feed during June, 7.19% more than last year and 3.27% more than the five-year average.

Average daily gain was comparable with last year and the average.  Closeout data showed June slaughter cattle had gained 3.64 pounds a day while in Kansas feedlots, compared with 3.7 pounds in 2013 and the average of 3.554 pounds.

Feeding efficiency also was comparable with last year and the average at 5.77 pounds of feed on a dry matter basis for every pound of gain.  Last year, the feeding efficiency was 5.76 pounds and the average is 5.816 pounds.

Feeding efficiency is declining seasonally, but the average makes a turn higher after June and gradually gets better into December.  Last year, feed efficiency didn’t bounce until July.

It’s little wonder feedlots are keeping cattle on feed a bit longer to pack on a few more pounds – feeding costs per hundredweight are down.  The data showed feeding costs in June at $91.36 per cwt, which is up 6.0% from the five-year average of $86.19 but 23.83% below last year’s $119.95.

 

PACKER MARGINS COULD UNDERPIN PRICES

 

Packer margins are thought to be very profitable currently as beef prices remain well above last year as beef prices set record highs along with hide and offal values.

USDA wholesale boxed beef prices Friday may have stumbled, but on a weekly basis, choice beef prices last week rose $8.29, or 3,27%, to $262.06 per cwt from $253.77 the previous week.

Choice beef also continued to rise counter to last year’s summer dip.  Last week’s $262.06 value was $75.38, or 40.38%, more than last year’s $186.68.

The choice/select spread showed signs of widening late last week, but it was too late to prevent the weekly score from continuing its descent to a seasonal low, which USDA data show should happen at any time.  The spread last week, at $3.11, was below last year’s $5.08 and the average of $6.18.

Monday, the USDA’s boxed-beef cutout value ended narrowly mixed with choice up $0.09 per cwt at $263.22 and select down $0.09 at $258.03.  The choice/select spread widened to $5.19, and there were only 95 loads of fabricated product sold into the spot market.

No bids or offers were reported in cash cattle markets Monday.  Traders remain cautious about stepping out with last week’s price declines against robust packer margins and a discount in futures markets.

More cattle may have to come to market in the short term, but there seems to be no urgency.  Feedlot showlists this week are estimated lower in all major feeding states except Nebraska, where they are up 36,000 head, or 56%, from last week.

The CME Feeder Cattle Index continues to make new highs, hitting $225.68 per cwt during the seven days ended Friday, up from $225.22 on Thursday.