Negotiated cash fed cattle sales continued to trend lower on Wednesday at mostly $126/cwt. in the Northern Plains and $125-$127 in the western Corn Belt. Dressed trade was $2-$5 lower than last week at $200-$203.
There were only two lots from Kansas—166 head—offered in the weekly Fed Cattle Exchange Auction. They sold for a weighted average price of $126.63/cwt. for delivery at 1-9 days.
Feeder Cattle futures tried for some stability in yesterday’s session but ultimately followed Live Cattle lower, led by the spot month.
Except for 20¢ lower at the back, Live Cattle futures closed an average of $1.23 lower (65¢ to $1.87 lower in spot Apr, which closed $5.30 lower week to week).
Feeder Cattle futures closed an average of $1.33 lower ($1.00 to $1.47 lower).
Choice boxed beef cutout value was $1.03 higher Wednesday afternoon at $224.38/cwt. Select was 35¢ lower at $216.39.
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After bouncing higher early in the session, major U.S. financial indices closed narrowly lower on Wednesday. Though expected, a wide swath of analysts attributed pressure to the Federal Reserve raising interest rates again.
Since it last met in January, according to the Federal Open Market Committee, “Information indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong in recent months, and the unemployment rate has stayed low. Recent data suggest that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2%. Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.”
The committee raised the target range for the federal funds rate 0.25% to 1.50-1.75%.
The Dow Jones Industrial Average closed 44 points lower. The S&P 500 closed 5 points lower. The NASDAQ closed 19 points lower.
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Reduced year-over-year steer slaughter last month, compared to heifers and cows, helped fuel the rally in cash fed cattle prices, says David Anderson, an Extension livestock economist with Texas A&M University.
In the latest issue of In the Cattle Markets, Anderson explains steer slaughter in February was 2.1% less than the previous year, while heifer slaughter increased 7.8%. Through the first half of March, steer slaughter was running about even with last year.
“The mix of animals going to market is an important part of this spring rally in prices,” Anderson says. “Relatively more heifers and cows than steers is working to moderate beef production, which is only up 2.5% so far this year…The expectation of growing steer and heifer supplies is contributing to falling Live Cattle prices on the futures market.”
Anderson notes that steer dressed weights are up 2.5 lbs. over last year. Heifer weights are up 7.2 lbs. and are 56 lbs. less than steer dressed weights. Cow dressed weights are 13.3 lbs. heavier.