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Feeder Cattle Contracts Crack $200 Ceiling
Cattle futures set new all-time highs this week. The June live cattle futures contract closed at $147.60/cwt today, up $7.48 from last week’s close. August fed cattle settled at $146.62/cwt, up $5.32 for the week. The October contract ended the week at $149.85/cwt. December closed at $151.75/cwt.
Feeder cattle contracts cracked the $200 ceiling last week and moved still higher this week. The August feeder cattle contract ended the week at $208.15/cwt, up $7.62 for the week. The September feeder cattle contract settled at $208.72, up $7.85 from the previous Friday.
The June WASDE report lowered USDA’s forecast of 2014 beef production by 0.6 percent. Their latest forecasts have 2014 beef production down 5.1 percent from last year, but 0.4 percent more than they predict for 2015. USDA expects 2014 slaughter steer prices to average between $143 and 149/cwt.
Strong meat demand is a big factor in this year’s record cattle and beef prices. Domestic meat demand was up 4.1 percent in April compared to a year earlier. On average, domestic demand for red meat and poultry has been up 2.7 percent over the last 12 months. April domestic demand for beef was up 4.0 percent compared to April 2013. On average, over the last 12 months beef demand was up 1.1 percent. Export demand for U.S. beef was up 24.9 percent in April compared to a year ago. The average for the last 12 months is up 11.6 percent.
USDA said this week that 19 percent of U.S. pastures were in poor or very poor condition on June 8, the same as the previous week and down from 24 percent poor or very poor a year ago.
Fed cattle prices were sharply higher this week on good sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $149.37/cwt, up $4.24 from last week's average and up $25.16 from a year ago. The 5 area average dressed price for steers was $236.38/cwt, up $4.54 for the week and up $42.07 from the same week last year.
Beef prices were lower this week. This morning, the boxed beef cutout value for choice carcasses was $231.53/cwt, up $1.59 from the previous Friday and up $31.38 from a year ago. The select carcass cutout was $223.89/cwt, up $2.73 from last week, and up $40.34 from a year earlier.
This week’s cattle slaughter totaled 605,000 head, down 1.5 percent from the previous week and down 6.1% from the corresponding week last year. The average dressed weight for steers slaughtered the week ending on May 31 was 844 pounds, up 1 pound from the week before, but down 6 pounds compared to the same week last year.
Feeder cattle prices at this week's Oklahoma City auction were $3 to $10 higher than the week before. This week's prices for medium and large frame #1 steers by weight were: 400-450# $256-$285, 450-500# $244-$272, 500-550# $224-$261, 550-600# $221-$245, 600-650# $209-$239, 650-700# $203.75-$219.25, 700-750# $194.50-$210, 750-800# $189-$204, 800-900# $180.50-$194.50, and 900-1000# $174-$185.25/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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