Slaughter Cattle Prices Into Seasonal Slide

Slaughter steer prices are headed lower, having begun a seasonal slide two weeks ago that usually lasts into late July or early August.

Average southern Plains slaughter cattle prices last week dipped $2.13 per cwt, or 1.31%, to $160.87 from $163 the previous week.  The market peaked the last week of March at $166.99.

USDA data compiled by the Livestock Marketing Information Center show that prices last year broke out of the spring/summer funk early during the second week of June.  From there, they moved unevenly higher until the Thanksgiving and Christmas holiday sell-off.

Where prices will go from here is the stuff of crystal balls, but if history is any indicator, they will decline, not fall, for at least another month or two.  They could soften for as long as four months with minor peaks for the Memorial Day and Independence Day holidays.




The level and weights of feedlot placements during the winter months suggests there should be adequate to ample supplies of slaughter cattle during this period.  In addition, the number of cattle on feed for 120 days or longer keeps growing, implying the fed cattle market is seeing, and will see, more and larger cattle coming to slaughter.

The data also say the number of cattle on feed for 120 days or longer should moderate with the next USDA Cattle-on-Feed report Friday.

Data also say feedlots are delaying the sale of fed cattle for slaughter.  Fed cattle marketings as a percent of total cattle on feed have a strong seasonal tendency to decline through February and then bounce.  But this year, this figure is running below last year and the previous five-year average.

That implies the cattle on feed are older and larger than in previous years because they are spending more time at the feed bunk.




Cash cattle markets Tuesday were quiet, although the USDA appeared to confirm rumors of a small trade at $253 per cwt on a dressed basis, $3 below the range of last week’s dressed-basis sales of $256 to $260.

The USDA also reported isolated sales of cattle at $157.25 to $159 per cwt on a live basis Tuesday.  These cattle weighed 1,300 to 1,325 pounds, but there was no report on their quality.

No other packer bids were reported with asking prices around $163 on a live basis and $263 dressed.

The USDA’s beef cutout value Tuesday was mixed with the choice cutout at $259.14 per cwt, up $0.68 from Monday.  Select was $249.55, down $2.65.

The CME Feeder Cattle Index for the seven days ended Monday was down $0.18 per cwt to $217.48, compared with Tuesday’s settlement of the Apr futures contract at $212.65.