Negotiated cash fed cattle trade remained undeveloped through Wednesday afternoon. If some of the fed cattle auctions—and a smattering of country sales—are any indication, though, steady money may be a hopeful stretch this week.
For instance, Choice 2-3 steers brought $110.00-$111.25/cwt. at Sioux Falls Regional in South Dakota. Choice 3-4 steers brought $109.00-$111.60.
Although too few to trend, there were some early live country sales in the western Corn Belt at $110, which was $1-$3 lower than last week’s trade in the region.
There were only 620 head offered in the weekly Fed Cattle Exchange auction Wednesday, and no takers.
As for Cattle futures, adjusting to the previous session’s rally seemed to be the main business.
Other than unchanged in June, Live Cattle futures closed an average of 35¢ lower.
After unchanged in the front two contracts, Feeder Cattle futures closed an average of 54¢ lower.
Wholesale beef values were lower on light demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 92¢ lower Wednesday afternoon at $213.16/cwt. Select was $1.80 lower at $197.18.
Major U.S. financial indices closed lower on Wednesday, with pressure from tech stocks, led by Apple—tied to reports of softer iPhone sales. Banking shares also declined.
The Dow Jones Industrial Average closed 205 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 64 points.
Culling decisions and the timing of them could be more complex for some this year, given the state of cull cow prices, says Josh Maples, Extension economist at Mississippi State University.
For price examples, Maples says average cull cow prices reported by AMS were about 12% lower year over year in South Dakota (July-October). Prices at San Angelo, Texas were 18% lower. They were 17% lower in Kentucky.
“While prices have been low already, we are now in the time of year when we typically expect lower cull prices,” Maples explains, in the latest issue of In the Cattle Markets. “Cow slaughter is seasonally higher during the last three months of the year as producers make culling decisions prior to winter. Combined with winter usually being a slower ground beef-demand time of the year, there usually is not much cull market strength until we get closer to Spring.”
For perspective, total cow slaughter this year is averaging 18.9% of total cattle slaughter, compared to a long-term average of 17.7% of total slaughter, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
“Total cow slaughter is up 7.3% year to date with beef cow slaughter up 10.5% year over year as beef cow culling returns to long-term average levels,” Peel says.
“Dairy cow slaughter is currently up 4.3% year over year.”
Using NASS data, analysts with the Livestock Marketing Information Center (LMIC) say the average dairy cow price for the quarter ending Oct. 1 was $1,230. That’s $380 less (-24%) year over year. In the latest Livestock Monitor, they explain the NASS data reflect only cows sold to be used as dairy herd replacements.
Add it all up and Maples says deciding whether to sell cull beef cows now or carry them through the winter could be less straightforward than usual, at least for some.
“Culling, even at current prices, will still make sense for many (probably even most) producers once the cost of carrying a cow through the winter is considered,” Maples says. “But, for producers with relatively low marginal wintering costs, this is at least a year to crunch the numbers.”