CATTLE OUTLOOK – Ron Plain and Scott Brown Ag Economics, MU August 12, 2016

CATTLE OUTLOOK – Ron Plain and Scott Brown

Ag Economics, MU   August 12, 2016

The August WASDE predicts this fall will bring our first 15 billion

bushel corn harvest and the first 4 billion bushel soybean harvest.

This is good news for feeder cattle prices.

U.S. beef exports during June were down 0.5% compared to a year ago.

Japan, South Korea, Canada and Mexico, respectively, were the top

three destinations for U.S. beef exports in June.  Beef exports were

up 2.0% during the first half of 2016.

Beef imports were down 16.3% in June and down 13.0% in the first half

of 2016.  A lot less beef is coming in from Australia because of

better grazing conditions there.

Imports of live cattle from Canada were down 6.9% in June and down

10.4% in the first half of 2016.  Cattle imports from Mexico were down

42.6% in June and down 16.0% in the first half compared to

January-June 2015.

Domestic demand for beef was up 2.2% in June, but down 1.8% in the

first half of 2016.  Lackluster growth in the U.S. economy has left

meat demand slightly lower than last year.  Overall meat demand was

down 1.1% during January-June compared to a year earlier.  Export

demand for U.S. beef was down 7.0% in June and down 5.0% in the first

half of 2016.

This week fed cattle prices were lower in moderate sales volume.

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

on a live weight basis was $116.91/cwt, down $2.03 from last week’s

average and down $35.82 from a year ago.  The 5-area dressed steer

price averaged $186.86/cwt, down $1.06 from the week before and down

$52.43 from a year ago.

Beef cutout was higher this week.  This morning, the choice boxed beef

cutout value was $201.51/cwt, up $2.56 from the previous Friday.  The

select carcass cutout this morning was $193.51/cwt, up $3.06 from last

week.

This week’s cattle slaughter totaled 581,000 head, down 0.7% from last

week, but up 6.8% from a year ago.  The average steer dressed weight

for the week ending on July 30 was 883 pounds, up 3 pounds from the

week before, down 3 pounds from a year ago, and below the year-ago

level for the 13th consecutive week.

Feeder cattle prices and stocker calf prices at Oklahoma City were

generally steady to $4 higher this week.  Prices for medium and large

frame #1 steers by weight group were: 400-450# $175-$177, 450-500#

$164-$177, 500-550# $147-$169.50, 550-600# $148-$166.50, 600-650#

$147-$169, 650-700# $147-$161.50, 700-750# $145.50-$159.35, 750-800#

$145.50-$156, 800-900# $138.25-$148 and 900-1000# $133.50-$142.75/cwt.

The August live cattle futures contract settled at $116.32/cwt today,

down $1.35 for the week.  October fed cattle settled at $114.52/cwt,

down $1.00 from the previous Friday.  December fed cattle futures

settled at $115.05/cwt.

August feeder cattle futures ended the week at $149.07/cwt, down 58

cents from a week earlier.  September feeder cattle gained 35 cents

this week to settle at $147.55/cwt.  October feeder cattle closed the

week up 38 cents at $144.25/cwt.