Fewer cattle are on feed than what was projected, but domestic beef demand is up.
By: Ron Plain and Scott Brown, University of Missouri
The March cattle on feed report was a bit bullish. It said that February placements were down 8.1% compared to a year ago. February marketings were down 2.1%. This left 0.5% fewer cattle on feed at the start of March than a year ago. The pre-release trade forecasts were for placements to be down 7.0%, marketings down 2.6% and the number on feed down 0.4% on March 1.
Domestic beef demand was up 16.3% in February, but foreign demand for U.S. beef was down 13.6%. U.S. beef demand has been above the year-ago level for each of the last 12 months. I would say the strong dollar and the labor problems at west coast docks were the main causes of the weak export demand during January. The growth in domestic demand more than outweighs the decline in export demand. Through the first ten full weeks of 2015, year-over-year beef production was down 2.2%, but the choice beef cutout value was up 10.8% and fed cattle prices were up 31.3%.
This morning the choice boxed beef cutout value was $244.38/cwt, up 31 cents from the previous Friday and up $3.55 from a year ago. The select carcass cutout was $244.56/cwt this morning, down 3 cents from last week, but up 61 cents from a year ago. The choice-select price spread has been very tight in recent days.
Fed cattle prices were mixed this week on light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $161.50/cwt, up 72 cents from last week's average and up $11.40 from a year ago. The 5 area average dressed price for steers was $255.28/cwt, down $3.81 for the week, but up $15.17 compared to a year ago.
Cattle slaughter this week totaled 518,000 head, down 1.1% from the week before and down 10.5% from the same week last year.
The average steer dressed weight for the week ending on March 7 was 876 pounds, up 1 pound from the week before and up 18 pounds compared to the same week last year. Steer weights have been above year-ago each week since June 14, 2014.
Feeder cattle prices at Oklahoma City were as much as $7 higher on calves, but $1 to $3 lower on heavy weight feeders. Prices for medium and large frame #1 steers by weight group were: 400-450# $306-$313, 450-500# $285-$303, 500-550# $275-$295, 550-600# $266-$282, 600-650# $246-$266, 650-700# $236-$250, 700-750# $207.50-$235, 750-800# $202.25-$217.50, 800-900# $186-$204, 900-1000#, $173-$191/cwt.
The April live cattle futures contract settled at $158.35/cwt today, up $4.08 for the week. June fed cattle settled at $150.47/cwt, up $5.20 from the previous Friday. August fed cattle gained $4.48 this week to settle at $148.10/cwt.
The March feeder cattle contract ended the week at $214.87/cwt, up $1.75 for the week. April feeders settled at $216.20/cwt which is $4.98 higher than the Friday before. The May contract ended the week at $215.40/cwt.