Negotiated cash fed cattle trade ranged from very limited on light demand to a standstill through Friday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend.
For the week, live prices were $1-$2 lower in the Texas Panhandle at $136-$137/cwt. and $135-$136 in Kansas. They were $1-$3 lower in Nebraska at $137 and steady to $3 lower in the western Corn Belt at $137-$138. Dressed trade was $2 lower at $218.
Week to week through Thursday, the five-area direct average steer price was $2.00 lower on a live basis at $136.58/cwt. The average price in the beef was $2.00 lower at $217.99.
Estimated total cattle slaughter last week was 621,000 head, just 1,000 head more than the previous week and 31,000 head fewer than the same week last year.
Live Cattle futures closed an average of 59¢ higher, except for unchanged and 37¢ lower in the back two contracts, supported by climbing wholesale beef prices.
Choice Boxed beef cutout value was $1.84 higher Friday afternoon at $284.31/cwt. Select was $1.21 higher at $273.97.
Feeder Cattle futures closed narrowly mixed, from an average of 23¢ lower to an average of 5¢ higher with pressure from front-month Corn futures.
Corn futures closed fractionally higher to 8¢ higher in the front six contracts, and then mostly 5¢ to 6¢ lower.
Soybean futures closed 8¢ to 13¢ lower.
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Major U.S. financial indices closed mixed Friday with primary pressure apparently from lower than expected earnings for bank stocks and less retail growth last month.
Advance estimates of U.S. retail and food services sales for December 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $626.8 billion, a decrease of 1.9% from the previous month, according to the U.S. Census Bureau.
The Dow Jones Industrial Average closed 200 points lower. The S&P 500 closed 3 points higher. The NASDAQ was up 86 points.
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“Average returns to cattle feeding in the Southern Plains, as calculated by LMIC (Livestock Marketing Information Center) jumped to $200 per steer in December, capping off the year with two months of returns well over $100. This boosted the 2021 average for the year solidly in positive territory, about $40 per head for the year,” say LMIC analysts in the latest Livestock Monitor.
Positive returns stemmed from the significant rally in fed cattle prices, given the increased input costs.
“LMIC assumes a six-month feeding window for a 750-lb. steer. Feeder cattle averaged $143.35/cwt. in June. LMIC estimated total production costs for feeding those animals increased 32% from last year (excluding cost of the feeder), from just under $500 in December 2020 to over $600 in December of 2021. Over that same time period the value of that fed steer rose 26%.”
Heading into 2022, LMIC analysts note that increasing feeder cattle prices will challenge cattle feeding returns, but they expect returns to be mostly positive.
For recent perspective, LMIC estimates a fed steer breakeven price of $133.03/cwt. for steers placed in December weighing 700-800 lbs. and costing $161.42 (Dodge City).
“Currently, LMIC forecasts for the Apr-May-Jun quarter are above that level at $135-139/cwt., but the summer quarter is below that level at $126-$131. It seems likely that cattle feeding returns will likely be positive for most of 2022, but that there may be some negative months in the third quarter that will keep the annual average in check,” LMIC analysts say.