Monday, March 7, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown Ag Economics, MU March 4, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown
Ag Economics, MU   March 4, 2016

USDA has announced that they will not be conducting the July cattle
inventory survey this year because of budgetary constraints.  This
means the January cattle inventory survey will be USDA’s only survey
of the total cattle herd this year.  Although the midyear herd
inventory survey hasn’t typically been a big mover for cattle futures,
it is important in tracking changes in the cow herd and the overall
rate of herd growth.

The February jobs report contained good news and bad news.  On the
bright side, it said 242,000 nonfarm jobs were added to payrolls in
February and the unemployment rate held steady at 4.9%.  The
disappointing news was that the average hourly wage declined 3 cents
and the average work week declined by 12 minutes.  In total, the
report indicates the likelihood of little change in meat demand.

Fed cattle prices were slightly higher this week in very light volume.
No quote was given for the 5-area average live steer price, but live
heifer prices averaged $136.00/cwt.  That is up $1.43 from the week
before.  Through Thursday, the 5-area average price for slaughter
steers sold on a dressed weight basis was $212.00/cwt, up $1.45 from
last week’s average, but down $38.00 from a year ago.

Beef cutout values were mixed this week.  This morning the choice
boxed beef cutout value was $220.77/cwt, up $1.94 from the previous
Friday, but down $28.22 from a year ago.  The select carcass cutout
was $212.01/cwt, down $1.73 from last week and down $33.62 from a year

This week’s cattle slaughter totaled 533,000 head, down 0.2% from last
week and down 0.4% from a year ago.

The average steer dressed weight for the week ending on February 20
was 886 pounds, down 5 pounds from the week before, but up 6 pounds
from a year ago.  This was the 88th consecutive week with steer
weights above the year-ago level.

Prices at the Oklahoma City Stockyards this week were mostly steady to
$2 higher on feeder steers and on calves compared to last week. Prices
for medium and large frame #1 steers by weight group were: 400-450#
$216-$220, 450-500# $185-$216, 500-550# $186-$209, 550-600#
$168.50-$200, 600-650# $165-$188, 650-700# $161-$180, 700-750#
$155-$170.50, 750-800# $152-$161.75, 800-900# $138-$156 and 900-1000#

Cattle futures ended the week close to where they started.  The April
live cattle futures contract settled at $136.35/cwt today, down 65
cents for the week.  June fed cattle settled at $126.47/cwt, up 52
cents from the previous week.  The August contract ended the week at
$121.92/cwt, up 55 cents from the previous Friday.

March feeder cattle ended the week at $158.50/cwt, down 15 cents from
a week earlier.  April futures lost 63 cents this week to close at
$158.22/cwt.  May feeder cattle settled at $157.17/cwt.

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