The 5-area direct average fed steer price last week was $110.13/cwt. on a live basis, which was 40¢ higher than the previous week. The average dressed steer price of $174.56 was 25¢ higher.
Cattle futures mostly edged higher Monday, with firm cash trade and increasing wholesale beef values.
Live Cattle futures closed an average of 45¢ higher.
Feeder Cattle futures closed an average of 25¢ higher except for unchanged to 30¢ lower in three contracts.
Wholesale beef values were sharply higher on Choice and higher on Select with good demand and light offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $2.46 higher Monday afternoon at $227.90/cwt. Select was 92¢ higher at $200.76.
Corn futures closed mostly 2¢ lower.
Soybean futures closed 1¢ to 3¢ higher.
Major U.S. financial indices closed higher Monday, with follow-through buying, based on strong quarterly earnings reports and reports of progress on the first phase of a U.S.-China trade deal.
The Dow Jones Industrial Average closed 132 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 82 points.
Cow slaughter and the mix of heifers on feed continue suggesting a cyclical plateau to the size of the nation’s cowherd.
“The number of heifers on feed (Oct. 1) was 4.4 million head, 2.3% higher year over year,” notes Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Over the last 20 years, heifers represented an average of 36.7% of feedlot inventories.” They represented 39.1% at the beginning of the month, he says, the highest percentage in more than 18 years. Peel notes the record low was in April 2015, when heifers represented 31.0% of the mix.
Further, Peel says beef cow slaughter so far this year is 2.4% more than last year. Total cow slaughter is up 3.0%, with dairy cow slaughter 3.5% higher.
“Total steer and heifer slaughter thus far in 2019 is up 1.0% year over year. Year-to-date steer slaughter is down 2.4% year over year, while heifer slaughter is up 7.4%…” Peel explains. “Modest increases in yearling and cow slaughter, combined with lower carcass weights, results in year-to-date beef production up 0.5% year over year. Beef production for 2019 is projected to total 27.1 billion lbs., 0.7% higher year over year. Beef production is expected to peak cyclically in 2020 with a slight year-over-year increase to 27.2 billion lbs.”
So far this year, Peel says steer carcass weights averaged 4.6 lbs. less than last year, while heifer carcass weights averaged 5.4 lbs. less. Cow carcass weights are averaging 6.6 lbs. less.
Considering Friday’s monthly Cattle on Feed report, Peel adds, “The 12-month moving average feedlot inventory reached 11.6 million head in August and has dropped slightly in the past two months. It is possible that feedlot inventories have peaked cyclically, although there is still a chance that average feedlot totals could push slightly higher into early 2020.”