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USDA Lowers Price Forecast For Fed Cattle
USDA slightly lowered their prediction of 2015 production of beef, pork, broilers and turkey. The September forecast of red meat and poultry production is 0.6 percent lower than the August forecast, but 2.4 percent higher than last year’s production. USDA is predicting 2016 beef production will be 5.9 percent more than this year, pork will be up 0.7 percent, broilers up 2.7 percent, and turkey up 7.9 percent.
USDA lowered their forecast of 2015 fed cattle prices by $2.50 to $152-$155/cwt and cut their 2016 slaughter steer price forecast by $3/cwt to $147-159/cwt.
More Mexican cattle are coming north, but fewer Canadian cattle are coming south compared to last year. Through July, cattle imports from Mexico are up 15.1 percent while imports from Canada are down 21.0 percent. In total, cattle imports are down 4.0 percent compared to January-July 2014.
Fed cattle prices this week were lower on moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $139.98/cwt, down $1.22 from last week’s average and down $18.72 from a year ago. The 5 area average dressed price this week for steers was $220.09/cwt, down $2.03 for the week and down $29.74 compared to the same week last year.
This morning the choice boxed beef cutout value was $237.98/cwt, down $2.65 from the previous Friday and down $12.55 from a year ago. The select carcass cutout was $227.13/cwt this morning, down $2.02 from last week and down $8.40 from a year ago.
Because of Labor Day, cattle slaughter this week totaled only 501,000 head, down 9.9 percent from the week before and down 14.9 percent from the same week last year.
The average steer dressed weight for the week ending on August 29 was 906 pounds, up 1 pound from the week before, up 29 pounds compared to the same week last year, above the year-ago level for the 63rd consecutive week, and tied with the record high set last November.
Because of the Labor Day holiday there was no feeder cattle auction at Oklahoma City this week. The Missouri combined auction report said prices were uneven this week in light volume. Prices for medium and large frame #1 steers by weight group were: 400-450# $255-$287.50, 450-500# $239-$292.50, 500-550# $231-$267, 550-600# $230-$257.50, 600-650# $210-$250, 650-700# $209.75-$231, 700-750# $200-$230, 750-800# $190-$212.50, 800-900# $182.50-$203.50, and 900-1000# $198/cwt.
Cattle futures were mixed this week. The October live cattle futures contract settled at $140.60/cwt today, up 13 cents for the week. December fed cattle settled at $142.37/cwt, down 40 cents from the previous week.
September feeder cattle ended the week at $200.70/cwt, down 67 cents from seven days earlier. The October feeder cattle contract lost 60 cents to close at $195.10/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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