Cattle Outlook: Less Beef in Cold Storage

May 26, 2014 05:20 AM
Cattle Outlook: Less Beef in Cold Storage

Fewer cattle entering the packing plant means less beef in the freezer.
By: Ron Plain and Scott Brown, University of Missouri

The decline in cattle slaughter is depleting the supply of beef in cold storage. On the last day of April, stocks of frozen beef were down 0.9% from the month before, down 21.1% from a year ago, and the lowest for any month since the end of September 2010. Compared to April 2013, total stocks of red meat and poultry in cold storage were down 17% with pork down 16.7%, frozen chicken down 15.3%, and the amount of turkey in cold storage down 18%.

USDA says feedlot marketings were down 2.04% during April. That is well in line with April steer and heifer slaughter which was down 2.15%. During the first four months of the year, steer and heifer slaughter was down 3.8% compared to January-April 2013. There was a 4% increase in the number of cattle placed on feed during April that weighed less than 600 pounds. Placements of all the heavier weight groups were down in number.

April was the fourth profitable month in a row for cattle feeding. Calculations by the Livestock Marketing Information Center indicate cattle feeders turned a profit of $30.78 per head on cattle marketed in April.

USDA said that 22% of U.S. pastures were in poor or very poor condition on May 18, down 1 point from the previous week and down from 30% poor or very poor a year ago.

Beef prices were higher this week. This morning the boxed beef cutout value for choice carcasses was $231.60/cwt, up $4.88 from the previous Friday and up $21.67 from a year ago. The select carcass cutout is $220.94/cwt, up $3.94 from last week.

Fed cattle sales volume was heavy this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $144.69/cwt, down $2.26 from last week's average, but up $20.24 from a year ago. The 5 area average dressed price for steers was $232.26/cwt, down $1.80 for the week, but up $32.41 from the same week last year.

This week's cattle slaughter totaled 599,000 head, up 1.4% from the previous week, but down 8.3% from the corresponding week last year. The average dressed weight for steers slaughtered the week ending on May 10 was 839 pounds, down 1 pound from the week before and down 3 pounds compared to the same week last year.

Feeder cattle prices at this week's Oklahoma City auction were mostly steady to $6 higher. This week's prices for medium and large frame #1 steers by weight were: 400-450# $228-$242, 450-500# $213-$248, 500-550# $209.75-$238, 550-600# $208-$237, 600-650# $196.50-$228, 650-700# $194.50-$208.50, 700-750# $185-$205, 750-800# $183-$196.50, 800-900# $174-$189, and 900-1000# $157-$173/cwt.

The June live cattle futures contract closed at $136.30/cwt today, down $1.60 from last week's close. August fed cattle settled at $137.12/cwt, down $1.25 for the week. The October contract ended the week at $141.15/cwt.

The August feeder cattle contract ended the week at $192.85/cwt, down 47 cents for the week.

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