CATTLE OUTLOOK – Ron Plain and Scott Brown Ag Economics, MU January 29, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown

Ag Economics, MU   January 29, 2016

USDA’s January Cattle on Feed report said there were 0.5% fewer cattle

on feed than at the start of 2015.  In an indication of the pace of

herd expansion, the number of steers on feed was up 3.1% and the

number of heifers down 7.3% at the start of this year.  The number of

steers on feed has been above the year ago level for 6 consecutive

quarters while heifers on feed have been down for 14 quarters in a

row.  Only 32.2% of cattle on feed were heifers, the lowest percentage

for any January since before my data series on this begins.

USDA’s latest Cold Storage report said there were 514 million pounds

of beef in cold storage at the end of December.  That was 0.6% more

than the month before and 15.6% more than a year ago.  It was the most

frozen beef since the end of April 2012.  Stocks of frozen pork were

up 8.3% year-over-year and frozen chicken stocks were up 21% compared

to December 31, 2014.

This morning the choice boxed beef cutout value was $218.85/cwt, down

$6.58 from the previous Friday and down $24.54 from a year ago.  The

select carcass cutout was $217.33/cwt, down $3.65 from last week and

down $19.70 from a year ago.

Despite a lower boxed beef value, fed cattle prices were higher this

week.  Through Thursday, the 5-area average price for slaughter steers

sold on a live weight basis was $131.00/cwt, up $3.38 from last week’s

average, but down $28.47 from a year ago.  The 5 area average dressed

price this week for steers was $209.16/cwt, up $7.16 for the week, but

down $40.91 compared to the same week last year.

This week’s cattle slaughter totaled 567,000 head, down 0.4% from last

week and also down 0.4% from a year ago.

The average steer dressed weight for the week ending on January 16 was

898 pounds, down 4 pounds from the week before, but up 16 pounds from

a year ago.  This was the 83rd consecutive week with weights above the

year-ago level.

Prices at the Oklahoma City Stockyards this week were $3 to $6 higher

on feeder steers and $5-$10 higher on calves than last week.  Prices

for medium and large frame #1 steers by weight group were: 400-450#

$216-$231, 450-500# $209-$216, 500-550# $188-$205.50, 550-600#

$171.50-$194, 600-650# $160-$179, 650-700# $155-$170, 700-750#

$150-$168, 750-800# $152-$162, 800-900# $145-$153.50 and 900-1000#

$140-$155.50/cwt.

Cattle futures were mixed this week.  The February live cattle futures

contract settled at $135.30/cwt today, up $3.23 for the week.  April

fed cattle settled at $134.00/cwt, up 93 cents from the previous week.

The June contract ended the week at $123.42/cwt, down 43 cents from

the previous Friday.

March feeder cattle ended the week at $157.25/cwt, down 65 cents from

a week earlier.  April futures lost $1.15 this week to close at

$157.90/cwt.  May settled at $155.82/cwt.