Calf and feeder cattle prices were mostly steady to higher last week as buyers tried to shore up orders ahead of the holiday break.
Steer and heifer calves traded $4-$8/cwt. higher, according to the Agricultural Marketing Service (AMS). Feeder steers sold steady to $3 higher while feeder heifers sold steady to $3 on either side of steady.
“Very few auctions will hold sales next week, causing buyers to scramble to procure cattle for wheat pasture before the holiday break,” AMS analysts explained. “Auction receipts across much of the Southeast were hampered due to wet weather conditions and the upcoming holiday interruption. This year marks the wettest December on record for many southeastern states, especially Alabama, Georgia and Florida.”
Except for 10¢ higher in September, Feeder Cattle futures closed an average of 24¢ lower week to week on Friday.
Negotiated cash fed cattle trade was steady to a touch higher than the previous week, through late Friday afternoon. For the week, live sales were steady at $119/cwt. in Kansas and Nebraska. Dressed trade in Nebraska was $3 higher at $190. Live sales in the western Corn belt were $1-$2 higher at $118-$120, while dressed sales were $3 higher at $190.
“Feedyards in Nebraska and Iowa remain plagued with muddy conditions, while another round of cold wet weather is expected,” say AMS analysts. “Northern
producers are dealing with several weeks of mud and are now reporting close to 1% yield loss. Estimated cattle harvest numbers for the week were 659,000 head.”
Live Cattle futures closed an average of 64¢ higher through the front three contracts, week to week on Friday (30¢ higher to $1.30 higher) and then an average of 35¢ lower (10¢ lower to $1.00 lower).
“Finished cattle prices are trading close to steady with year-ago prices and are trading at their highest level since the middle of May,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cash prices have increased about $6 in the last five weeks and are about 11% higher than their summer low in late August and early September.”
Griffith expects cattle prices next year to be similar to this year, as long as domestic and international demand for U.S. beef remain strong.
“Markets could be swayed in either direction as trade deals are signed or discarded,” Griffith says. “This means there is more risk in cattle prices moving lower in 2019 than there is of cattle prices moving higher, given supply and demand fundamentals. Thus, producers should plan for lower returns the next 12 months.”
Week to week, Choice boxed beef cutout value was $3.09 higher Friday afternoon at $214.05/cwt. Select was $4.36 higher at $207.50.
Retail beef prices continue higher than a year earlier, despite heftier supplies.
November Choice retail beef prices were $5.911/lb., up from $5.840 in October and 1.8% above the November 2017 price of $5.807, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. Through November, Choice retail beef prices averaged 0.2% more than the previous year. The all-fresh retail beef price averaged 0.7% more for the same period.
“Packer demand has accelerated the pace of fed cattle slaughter in fourth-quarter 2018, which supports a slightly higher beef production forecast for 2018,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook.
The aggressive slaughter pace pushed estimated beef production for this year 25 million lbs. higher to 26.9 billion lbs. ERS analysts note lighter carcass weights and less projected cow slaughter in the fourth quarter partially offset increased steer and heifer slaughter. Likewise, beef production for 2019 was reduced slightly based on the expectation of lighter carcass weights. Estimated beef production for next year was reduced by 25 million lbs. to 27.8 billion lbs.
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index||Dec. 20||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$158.70||– $0.09|
|700-800 lbs.||$151.05||– $0.08|
|800-900 lbs.||$149.61||+ $0.50|
|500-600 lbs.||$161.42||+ $4.69|
|600-700 lbs.||$148.82||+ $3.35|
|700-800 lbs.||$146.02||+ $1.90|
|400-500 lbs.||$152.39||+ $4.88|
|500-600 lbs.||$144.34||+ $2.37|
|600-700 lbs.||$136.15||– $2.85|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Dec. 21 ($/cwt)||Change|
|Ch-Se Spread||$6.55||– $1.27|
|Feeder Cattle||Dec. 21||Change|
|Jan ’19||$147.350||– $0.225|
|Live Cattle||Dec. 21||Change|
|Feb ’19||$122.700||+ $0.300|
|Feb ’20||$117.625||– $0.400|
|Corn futures||Dec. 21||Change|
|Mar ’19||$3.784||– $0.062|
|Mar ’20||$4.086||– $0.040|
|Oil CME-WTI||Dec. 21||Change|
|Equity Indexes||Dec. 21||Change|
|Dow Industrial Average||22445.27||– 1655.24|
|S&P 500||2416.62||– 183.33|
|Dollar (DXY)||96.95||– 0.11|