Tuesday, June 28, 2016

Cattle Outlook Ron Plain and Scott Brown Ag Economics, MU June 24, 2016

Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU
June 24, 2016

USDA released their June Cattle on Feed report this afternoon. It said there were 2.2% more cattle on feed than on June 1, 2015. May placements were up 9.6% and May marketings were up 4.9% compared to a year ago. The number of cattle on feed was the highest for any June since 2012. Both placements and marketings in May were above the year ago level for the fourth consecutive month. There were few surprises as the report came in very close to expectations.

There were 447 million pounds of beef in cold storage at the end of May. That is 1.4% less than the month before and 5.9% less than on May 31, 2015.

Yesterday's vote by the United Kingdom to leave the European Union has strengthened the U.S. dollar. That is likely to have a negative impact on U.S. exports.

USDA weekly crop progress report said that 9% of U.S. pastures were in poor or very poor condition as of June 19. That is up 1 point from the week before and the same as a year ago.

Fed cattle prices were lower this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $116.09/cwt, down $4.94 from last week's average and down $32.59 from a year ago. The 5-area dressed steer price averaged $187.82/cwt, down $7.21 from the week before and down $50.19 from a year ago.

This morning the choice boxed beef cutout value was $214.00/cwt, down $8.98 from the previous Friday and down $40.53 from a year ago. The select carcass cutout this morning was $198.38/cwt, down $2.12 from last week and down $51.30 compared to last year. The choice-select spread, $15.62/cwt this morning, remains high but is down from record levels earlier this month.

This week's cattle slaughter totaled 608,000 head, up 0.2% (1,000 head) from last week and up 8.8% from a year ago. The average steer dressed weight for the week ending on June 11 was 864 pounds, unchanged from the week before and down 5 pounds from a year ago.

Feeder cattle prices at Oklahoma City this week were $2 to $6 lower than last week. Stocker calf prices were $10 to $15 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $149, 450-500# $153, 500-550# $144.50-$156.50, 550-600# $144-$154, 600-650# $138.50, 650-700# $141.50-$143, 700-750# $132.50-$144.50, 750-800# $125-$143.75, 800-900# $130.50-$138.75 and 900-1000# $120-$128.75/cwt.

The June live cattle futures contract settled at $114.70/cwt today, down $2.57 for the week. August fed cattle settled at $110.87/cwt, down $2.48 from the previous Friday. October ended the week at $110.87/cwt.

Corn futures were sharply lower this week, which helped boost feeder cattle futures. August feeder cattle futures ended the week at $139.45/cwt, up $2.03 from a week earlier. October feeder cattle closed the week up $1.35 at $136.80/cwt.

COW/CALF CORNER The Newsletter From the Oklahoma Cooperative Extension Service June 27, 2016

The Newsletter

From the Oklahoma Cooperative Extension Service
June 27, 2016

In this Issue:

Many factors affecting beef market prices and volatility
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

A wide variety of internal and external factors are impacting beef and cattle price levels and volatility.  Beef production is at a seasonal peak in June with weekly beef production since late May estimated to be nearly 7 percent above year ago levels.  Fed cattle prices have dropped and could be near an early seasonal low with feedlots ahead of schedule for summer marketings.  Year over year cattle slaughter is up while cattle carcass weights are lower compared to last year, moderating beef production increases somewhat.  With Independence Day meat already booked, wholesale beef values have dropped sharply the past ten days to support sales of seasonally large beef supplies.  If the three-day July 4 weekend results in strong retail beef movement, beef markets may maintain good momentum through the summer doldrums between July 4 and Labor Day meat sales in August.  The latest retail beef prices indicate that beef prices are declining quite slowly; in fact, the all fresh beef price for May was up slightly from April.  Overall indications are that beef demand is holding strong in the face of growing beef supplies.  Beef movement this spring has been good; indicated in part by the drawdown of large beef cold storage supplies to levels six percent below year earlier levels in the latest report.

The June Cattle on Feed report was very close to expectations and should not provoke much market reaction.   The report did confirm strong marketings that suggest that feedlots continue to be very current, as evidenced by declining carcass weights.  The report also confirmed continued year over year increases in feedlot placements meaning that feedlot production will be cyclically higher late in the year.  The increased placements were all in the heavy weight categories and will be marketed out of feedlots in the fourth quarter of the year.  June 1 feedlot inventories were 102 percent of year ago levels.  Despite larger feedlot inventories and big feedlot placements, feedlots are in significantly better shape now compared to this time last year and well positioned to handle the challenges of increased feedlot production in the coming months as long as marketings continue at a good pace 

Last week’s Brexit vote, with the United Kingdom opting in a close vote to exit the European Union, sent shock waves through global markets and especially for currency exchange markets.  The U.S. dollar strengthened, not only against the British pound, but also against most other currencies.  The Japanese yen also strengthened sharply as global markets turned to the safe havens of the dollar and the yen.  It is likely that a good deal of the uncertainty surrounding the UK departure from the European Union will subside but the timetable is unknown and some impacts will persist for extended periods or permanently.  Meantime, U.S. beef and other meat markets are hampered by the additional headwinds of a stronger dollar slowing exports and supporting imports. 

Soybeans led a crop price rally over the last month, mostly on crop concerns out of South America.  Corn followed suit supported by ample fund buying which all crashed down last week on the reality that the U.S. corn crop is large and in very good shape at this point in the year.  Higher average soybean prices are expected in the coming crop year, with U.S. corn prices close to year earlier levels.  This week’s crop acreage report could show some shift of corn acres to soybeans although total planted acreage could be bigger with less prevented plant acres expected compared to last year.  Corn, soybean and wheat acreage could all shift somewhat with this next report. Major impacts on crop markets and prices are not expected but the uncertainty is there. In general, beef market fundamentals are quite strong but broad-based market volatility will continue to be a challenge for producers.

Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national origin, sex, age, religion, disability, or status as a veteran in any of its policies, practices or procedures. This includes but is not limited to admissions, employment, financial aid, and educational services.  References within this publication to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement by Oklahoma Cooperative Extension Service.

Gardening Minute 6/28/2016 - Farmers Markets

Gardening Minute

This is Jason Lamb with your Gardening Minute.

Local farmers markets are a valuable economic resource for communities and is a great way to get fresh fruit, vegetables, meats, and locally made foods and products. Farmers markets support local growers and provides the freshest produces.

        In New Mexico Farmers Markets were officially started in 1971 and have grown from three original markets to 70 farmers markets across the state with a gross annual income of $9 million. New Mexico ranks 11th in the nation in terms of the number of Farmers Markets relative to it’s population.  In recent years the availability of the EBT, WIC, and SNAP programs have been included and offer a “Double Up on Food Bucks” that doubles your purchasing power for participants.

        90 percent of customers at most Farmers Markets come from the local community as well as most vendors.

We would like you to come and support the Tucumcari Farmers Market. The doors will open on Saturday July 9th at Wailles Park, at the corner of Tucumcari Blvd. and Date Street from 10-12 or until sold out and continue until October 15th. They will also be open on Tuesdays from 5:30-7:00. So come and support our local growers and our local economy.

For more information about Farmers Markets please contact us at the Cooperative Extension Office at 461-0562.  This has been your Gardening Minute with Jason Lamb your Quay County Ag. Extension Agent. Where are programs are open to everyone.