Friday, February 5, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown Ag Economics, MU February 5, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown
Ag Economics, MU   February 5, 2016

The January cattle inventory survey said the U.S. herd has grown for
the second consecutive year.  According to USDA, the country started
2016 with 92 million cattle and calves, up 3.2% from a year earlier
and the most cattle at the start of a year since 2011.  The 3.2%
increase is the biggest annual inventory increase since 1974.  USDA
lowered their estimate of the January 2015 cattle inventory by 657,000

USDA reduced the 2014 calf crop by 378,000 head making it smaller than
the year before for the 19th consecutive year.  The 2015 calf crop was
2.3% larger than the year before, which is the first increase since
1995. The combined number of heifers not kept for breeding plus steers
was up 3.9% at the start of 2016.

The inventory of beef cows was up 3.5% and dairy cow inventory was up
0.1% on January 1.  Beef replacement heifers were up 3.3% and dairy
replacements up 2.4% compared to 12 months earlier.  USDA cut their
estimate of the January 2015 inventory of beef cows by 391,000 head,
but added 309,000 to the number of beef placement heifers.

Fed cattle prices were higher this week in very light volume.  Through
Thursday, the 5-area average price for slaughter steers sold on a live
weight basis was $132.20/cwt, up $1.20 from last week’s average, but
down $26.53 from a year ago.  There was no reported price quote this
week for dressed steer prices.

This morning the choice boxed beef cutout value was $222.50/cwt, up
$3.65 from the previous Friday, but down $19.48 from a year ago.  The
select carcass cutout was $218.45/cwt, up $1.12 from last week, but
down $16.39 from a year ago.

This week’s cattle slaughter totaled 534,000 head, down 5.8% from last
week and down 2.2% from a year ago.

The average steer dressed weight for the week ending on January 23 was
899 pounds, up 1 pound from the week before and up 19 pounds from a
year ago.  This was the 84th consecutive week with steer weights above
the year-ago level.

Prices at the Oklahoma City Stockyards this week were steady to $3
lower on feeder steers and $3-$5 lower on calves than last week.
Prices for medium and large frame #1 steers by weight group were:
400-450# $210-$222, 450-500# $214-$217.50, 500-550# $185-$200,
550-600# $178-$197, 600-650# $157.50-$186, 650-700# $160-$174.50,
700-750# $153-$163, 750-800# $149-$155.75, 800-900# $141.50-$149.75
and 900-1000# $137-$151.50/cwt.

Live cattle futures were a bit higher this week while feeder cattle
were lower.  The February live cattle futures contract settled at
$136.05/cwt today, up 75 cents for the week.  April fed cattle settled
at $134.40/cwt, up 40 cents from the previous week.  The June contract
ended the week at $124.05/cwt, up 63 cents from the previous Friday.

March feeder cattle ended the week at $153.82/cwt, down $3.43 from a
week earlier.  April futures lost $3.20 this week to close at
$153.47/cwt.  May feeder cattle settled at $153.05/cwt.

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