Friday, May 27, 2016

Cattle Outlook Ron Plain and Scott Brown Ag Economics, MU May 27, 2016



Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU
May 27, 2016


USDA's May Cattle on Feed report said there were 10.783 million cattle on feed at the start of April. That was 1.3% more than a year ago and the most for any May since 2012. April placements were up a surprising 7.5%. May was the third consecutive month with placements higher than a year ago. April marketings were 1.2% more than in April 2015 despite one fewer slaughter day.

There were 452 million pounds of beef in cold storage at the end of April according to USDA's monthly Cold Storage report. That was down 3.2% from the month before and down 6.6% from a year ago. That is the smallest stocks of frozen beef since the end of 2014. Stocks of pork in cold storage were down 9.4% at the end of April compared to 12 months earlier. Frozen chicken in cold storage was up 5.3% and turkey stocks were up 0.7% compared to a year earlier.

USDA estimates that only 8% of U.S. pastures were in poor or very poor condition on May 22. That is the same as the week before and down 2 points from a year ago.

Fed cattle prices were sharply lower this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.81/cwt, down $6.33 from last week's average and down $33.68 from a year ago. The 5-area dressed steer price averaged $196.76/cwt, down $7.27 from the week before and down $52.95 from a year ago.

This morning the choice boxed beef cutout value was $222.31/cwt, down $2.79 from the previous Friday and down $32.80 from a year ago. The select carcass cutout this morning was $201.73/cwt, down $7.12 from last week. The choice-select spread is an astonishing $20.58/cwt, the largest since June 4, 2013.

This week's cattle slaughter totaled 586,000 head, down 0.2% from last week, but up 11.6% from a year ago which was light because of the Memorial Day holiday. The average steer dressed weight for the week ending on May 14 was 863 pounds, up 1 pound from the week before, but down 4 pounds from a year ago. This was the second week that steer weights averaged below the year-ago level since the week ending on June 14, 2014.

Prices for feeder cattle at the Oklahoma City Stockyards were $5 to $10 lower compared to last week. Stocker calf prices were $8 to $15 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $172-$188, 450-500# $165-$189, 500-550# $150-$171, 550-600# $147-$165, 600-650# $143.50-$162.50, 650-700# $123.50-$169, 700-750# $133-$147.75, 750-800# $135-$143.25, 800-900# $120-$136.50 and 900-1000# $124.50-$130.25/cwt.

The June live cattle futures contract settled at $119.70/cwt today, down $1.35 for the week. August fed cattle settled at $116.42/cwt, down $1.03 from the previous Friday. October ended the week at $115.28/cwt. August feeder cattle futures ended the week at $146.70/cwt, down $1.22 from a week earlier.

Monday, May 16, 2016

Cattle Outlook Ron Plain and Scott Brown Ag Economics, MU May 13, 2016



Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU
May 13, 2016


USDA's May WASDE is predicting 4.7% more beef this year than last and 4.0% more beef in 2017 than this year. Total red meat and poultry production is expected to be up 3.1% this year and up 2.9% next. That is faster than population growth or expected export growth, so U.S. per capita meat consumption is expected to increase 3.8 pounds this year and 2.8 pounds next year.

More meat means lower prices. Slaughter steer prices are forecast to be roughly $22/cwt lower this year than in 2015 and another $3/cwt lower in 2017. USDA is predicting a record corn harvest this fall with the marketing year average price for corn between $3.05 and $3.65 per bushel.

USDA's weekly Crop Progress report says 9% of U.S. pastures were in poor or very poor condition on May 8. That compares 10% the week before and 12% poor or very poor a year earlier.

Both boxed beef values and fed cattle prices are higher this week. This morning the choice boxed beef cutout value was $217.94/cwt, up $14.28 from the previous Friday, but down $44.75 from a year ago. The select carcass cutout this morning was $205.82/cwt, up $10.91 from last week, but down $44.70 from a year ago. The choice-select spread is quite large at $12.12/cwt.

Fed cattle prices were strongly higher this week in light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $128.00/cwt, up $9.97 from last week's average, but down $31.44 from a year ago. The 5-area dressed steer price averaged $202.86/cwt, up $12.88 from the week before.

This week's cattle slaughter totaled 601,000 head, up 2.4% from last week and up 5.8% from a year ago. Year-to-date steer slaughter is up 6.8%. It looks like the upturn in the calf crop occurred earlier than USDA's cattle inventory survey indicated.

The average steer dressed weight for the week ending on April 30 was 868 pounds, down 2 pounds from the week before, but up 3 pounds from a year ago. This was the 98th consecutive week with steer weights above the year-ago level.

Prices for feeder and stocker cattle this week at the Oklahoma City Stockyards were $4 to $10 higher in good volume compared to last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $188-$199, 450-500# $163-$199, 500-550# $165.50-$188.50, 550-600# $171-$181.50, 600-650# $150-$175, 650-700# $149-$166.75, 700-750# $140-$158.50, 750-800# $135-$156.50, 800-900# $138-$149.50 and 900-1000# $129-$140.50/cwt.

Today, the June live cattle futures contract settled at $123.42/cwt, up $2.695 for the week. August fed cattle settled at $118.72/cwt, up 82 cents from the previous Friday. The October contract ended the week at $117.97/cwt. May feeder cattle futures ended the week at $147.05/cwt, down 32 cents from a week earlier. August futures lost 92 cents this week to close at $146.25/cwt. September settled at $144.22/cwt.

COW/CALF CORNER The Newsletter From the Oklahoma Cooperative Extension Service May 16, 2016



COW/CALF CORNER
The Newsletter

From the Oklahoma Cooperative Extension Service
May 16, 2016

In this Issue:

Beef bounces back
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

Percentage of mature weight at puberty in heifers
Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist


Beef bounces back
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

Beef and cattle prices bounced back sharply in the past ten days.  Choice boxed beef ended last week at $218.56/cwt., up $14.82cwt. from the recent low on May 6.  Wholesale prices were generally higher last week for end meats (round and chuck) as well as middle meats (rib and loin).  Five-market fed cattle prices ended the week of May 13 at $132.64/cwt., up $14.61/cwt. from the May 4 low.  Auction prices for feeder cattle in Oklahoma were mostly up four to six percent in the past one to two weeks.

Price improvement has occurred despite continuing year over year increases in beef production.  For the week ending May 14, estimated beef production was up 6.1 percent year over year, contributing to a ten week average increase of 5.3 percent compared to the same period last year.   Cattle slaughter was estimated at 601 thousand head last week, up 5.8 percent year over year.  Average cattle slaughter has been 4.1 percent higher than last year for the last ten weeks.  Carcass weights are still up year over year but have decreased dramatically in recent weeks.  Average steer carcass weights were 868 pounds last week, down 26 pounds from early March and just 3 pounds heavier than the same period last year.

The recent rally in cattle and beef prices provides a new base for seasonal price movements through the summer and the remainder of the year.  Beef production is expected to increase seasonally through June but this will be tempered both by the recent acceleration in cattle marketings that is pulling cattle ahead of the seasonal peak combined with smaller year over year increases in carcass weights.   Beef production will likely trend higher in the second half of the year but carcass weights may partially offset increased cattle slaughter.  The recent seasonal decline in carcass weights may not be done yet and carcass weight may drop below year earlier levels for much of the second half of the year.  Steer carcass weights have declined 62 pounds from the October peak last fall.  This compares to an average fall to spring seasonal decrease of 41 pounds the past five years.  A typical seasonal increase in carcass weights this fall from current levels would leave steer carcass weights ten to 20 pounds below the record carcass weights from the fall of 2015.  This will depend on whether feedlots continue to market cattle aggressively and maintain a faster turnover rate. 


Percentage of mature weight at puberty in heifers
Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist

For years, the accepted target weight for yearling replacement beef heifers at breeding was 65% of their mature weight.  Recently that target has been questioned.  Oklahoma State University reproductive physiologists have studied the weight that beef heifers reach puberty in relationship to their eventual mature weight.  A total of 34 crossbred heifers (in 3 different years) were studied at puberty and again when they had reached maturity at 5 to 7 years of age.  The heifers were at least ¾ Angus and ¼ or less Hereford.  Shrunk weights were obtained when concentrations of progesterone in the plasma indicated that cycling activity had begun.  Please remember that “average” is the point at which approximately half of the heifers reached puberty.  The “average” weights at puberty were statistically similar (695 lb, 695 lb, and 737 lb) for the three years.  Mature weights were obtained in mid-gestation, adjusted to a body condition score of 5.  Mature “average” body weights were also similar (1269 lb, 1256 lb, and 1280 lb) for cows born in all three years.  The mean (or “average”) weight at which heifers reached puberty was 56% of the mature weight.  Figure 1 below shows the percentage of heifers reaching puberty at the incremental increases in percentage of mature weight.cid:image001.jpg@01D1AF52.B27360E0
Only 12% of the heifers reached puberty at 50% of mature weight or less.  Only forty-seven (47%) percent of the heifers reached puberty at 55% of mature weight or less.  Ninety-one (91%) percent of the heifers reached puberty at 60% of mature weight and 97% had reached puberty by the time they weighed 65% of the mature weight.  Producers wanting to be certain that a high percentage (90% or more) of their replacement heifers have reached puberty before the start of the breeding season, need to have heifers weigh at least 60% of the mature weight.   For example, if a producer goes to the expense and effort of estrous synchronization and AI, getting the most heifers bred artificially is probably the goal.  In this scenario, making certain that all of the heifers weighed 60% or more of the mature weight makes sense.  Other producers may wish to place maximum selection pressure on early puberty and high reproductive soundness.  They may choose to turn bulls in with heifers at 55% of mature weight and cull any open heifers after a relatively short (45 to 60 day) breeding season.  Source:  Davis and Wettemann. 2009 Oklahoma State University Animal Science Research Report.

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