Drier conditions and recently higher cash prices fostered increased calf and feeder cattle trade in some areas last week. In other areas, continued wet conditions limited receipts and demand.
Yearling steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). Calves traded from $3 lower to $4 higher.
“There was very good demand for yearlings as the supply coming off grass tightens and the cash fed cattle market moves higher,” say AMS analysts. “Bawling calves seem to be finding the most variable demand, very dependent on how much or little health risk buyers view each lot as having…Discounts for those calves without shots or legitimate weaning programs are severe.”
Week to week on Friday, Feeder Cattle closed $1.01 lower through the front three contracts and then 30¢ lower to 37¢ cents higher across the rest of the board.
Although calf prices bucked the seasonal trend in some parts of the country, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions that increased support likely lies at least six weeks into the future. If temperatures and precipitation cooperate, he says calf prices this spring could be 2-3% higher than last year.
Based on USDA reports, negotiated cash fed cattle trade through Friday afternoon was looking most steady to mixed. Live prices in the Southern Plains were steady to $1 lower at $108/cwt. Dressed trade in the North was $1-$3 higher at mostly $173 in the western Corn Belt and at $173-$175 in Nebraska.
Live Cattle futures closed an average of 71¢ higher week to week on Friday (27¢ higher to $1.47 higher in spot Oct).
There was an explosion at Cargill’s Dodge City packing facility this week, in a room adjacent to the main facility. Cattle harvest stopped for the remainder of the week but is expected to be back to full speed by early this week.
Wholesale beef values continued to rebound seasonally. Choice boxed beef cutout value was $2.48 higher week to week on Friday at $218.04/cwt. Select was $4.36 higher at $193.04.
“The domestic supply of meat is extremely strong and all indications are that it will continue to grow. It seems like a stretch to think that the increased production can be absorbed by the domestic market and maintain price levels, much less strengthen prices,” Griffith says, in his weekly market comments. “U.S. red meat and poultry consumption for 2019 is estimated at 220.4 lbs. per person, which is about 2.5 lbs. higher than 2018, with 2018 consumption being the highest since 2007. The estimate for 2020 meat and poultry consumption is 3.1 lbs. higher than 2019. These consumption numbers do not represent demand, but how much meat must be consumed domestically based on production. These estimates are saying the export market is vital to support farm level prices.”
USDA forecasts more U.S. beef exports next year, compared to this year’s strong pace.
“Total exports (beef) in 2020 are forecast up 6% to a record 3.3 billion lbs., accounting for 12% of U.S. production,” say Analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The United States is poised to expand market share in top markets such as Japan, South Korea, and Taiwan as key competitor Australia struggles to maintain its market shares, given its reduced exportable supplies and its dominance in filling China demand.”
At the same time, ERS expects the U.S. to import less beef in 2020.
“U.S. imports will likely be limited by a combination of tighter supplies in Oceania and expected increased demand for beef in Asia due to African Swine Fever,” say ERS analysts.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts # head Oct. 18 |
Auction (change) |
Direct (change) |
Video/Net (change) |
Total (change) |
|
274,000 (+55,500) |
44,000 (+25,400) |
2,100 (-31,100) |
320,100 (+20,300) |
CME Feeder Index
| CME Feeder Index* | Oct. 17 | Change |
| $145.60 | + $0.97 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Oct. 18 | Change |
| 600-700 lbs. | $151.45 | + $0.15 |
| 700-800 lbs. | $149.33 | + $1.31 |
| 800-900 lbs. | $146.84 | + $0.37 |
South Central
| Steers-Cash | Oct. 18 | Change |
| 500-600 lbs. | $149.18 | + $0.90 |
| 600-700 lbs. | $146.59 | + $0.74 |
| 700-800 lbs. | $147.70 | + $2.08 |
Southeast
| Steers-Cash | Oct. 18 | Change |
| 400-500 lbs. | $140.25 | + $0.23 |
| 500-600 lbs. | $132.98 | + $1.13 |
| 600-700 lbs. | $131.20 | + $3.43 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Oct. 18 ($/cwt) | Change |
| Choice | $218.04 | + $2.48 |
| Select | $193.04 | + $4.36 |
| Ch-Se Spread | $25.00 | – $1.98 |
Futures
| Feeder Cattle | Oct. 18 | Change |
| Oct | $143.500 | – $0.600 |
| Nov | $142.850 | – $1.400 |
| Jan ’20 | $139.450 | – $1.025 |
| Mar | $138.850 | – $0.300 |
| Apr | $140.325 | – $0.025 |
| May | $141.150 | + $0.100 |
| Aug | $145.700 | + $0.375 |
| Sep | $144.700 | – $0.075 |
| Live Cattle | Oct. 18 | Change |
| Oct | $110.475 | +$1.025 |
| Dec | $113.625 | +$1.475 |
| Feb ’20 | $119.075 | +$1.025 |
| Apr | $120.925 | +$0.725 |
| Jun | $113.450 | +$0.325 |
| Aug | $111.400 | +$0.275 |
| Oct | $112.625 | +$0.300 |
| Dec | $114.700 | +$0.475 |
| Feb ’21 | $116.450 | +$0.775 |
| Corn futures | Oct. 18 | Change |
| Dec | $3.910 | – $0.066 |
| Mar ’20 | $4.026 | – $0.050 |
| May | $4.094 | – $0.032 |
| Jul | $4.152 | – $0.012 |
| Sep | $4.064 | – $0.012 |
| Dec | $4.102 | – $0.002 |
| Oil CME-WTI | Oct. 18 | Change |
| Nov | $53.78 | – $0.92 |
| Dec | $53.87 | – $0.91 |
| Jan ’20 | $53.82 | – $0.90 |
| Feb | $53.62 | – $0.92 |
| Mar | $53.37 | – $0.97 |
| Apr | $53.08 | – $1.02 |
Equities
| Equity Indexes | Oct. 18 | Change |
| Dow Industrial Average | 26770.81 | – 45.78 |
| NASDAQ | 8089.54 | + 32.50 |
| S&P 500 | 2986.17 | + 15.90 |
| Dollar (DXY) | 97.14 | – 1.19 |