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July Was Good Month For Middleman
USDA’s August Cattle on Feed report said July marketings were down 0.7 percent, July placements up 1.6 percent, and the number of cattle on fed up 1.6 percent at the start of August. Daily marketings were much higher than last year as there were two fewer slaughter days in July this year compared to last year. Placements were higher than expectations. The average of pre-release trade forecasts was for July placements to be down 0.4 percent, July marketings down 0.7 percent, and the number on feed at the start of August up 1.3 percent.
The average retail price of choice beef was $6.09 per pound during July. That was down 11 cents from the month before and down 27.5 cents from July 2015. July was a good month for middlemen. The farm to retail price spread for choice beef ($3.54 per retail pound) was record high for the second consecutive month. The wholesale to retail price spread for choice beef ($2.97 per retail pound) was the largest since October 2015. The farmer's share of the retail price was the lowest since December 2009.
The 5-area average price for slaughter steers was $117.50/cwt in July. That was down $5.50 from June, down $31.30 from last July, and the lowest for any month since July of 2012.
This week fed cattle prices were steady in heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $117.54/cwt, up 63 cents from last week’s average, but down $29.73 from a year ago. The 5-area dressed steer price averaged $186.06/cwt, down 80 cents from the week before and down $46.49 from a year ago.
Beef cutout value was mixed this week. This morning, the choice boxed beef cutout value was $200.15/cwt, down $1.36 from the previous Friday. The select carcass cutout this morning was $194.00/cwt, up 49 cents from last week.
This week’s cattle slaughter totaled 599,000 head, up 3.6 percent from last week and up 9.9 percent from a year ago. The average steer dressed weight for the week ending on August 6 was 886 pounds, up 3 pounds from the week before, down 9 pounds from a year ago, and below the year-ago level for the 14th week in a row.
Feeder cattle prices were steady and stocker calf prices $1 to $3 higher this week at Oklahoma City. Prices for medium and large frame #1 steers by weight group were: 400-450# $182.50, 450-500# $167-$171, 500-550# $160-$169, 550-600# $155-$169, 600-650# $145-$166.50, 650-700# $144-$164, 700-750# $149.75-$160, 750-800# $141-$154, 800-900# $138-$148 and 900-1000# $130-$140/cwt.
Cattle futures were lower this week. The August live cattle futures contract settled at $113.55/cwt today, down $2.77 for the week. October fed cattle settled at $110.25/cwt, down $4.27 from the previous Friday. December fed cattle futures settled at $111.72/cwt. August feeder cattle futures ended the week at $146.07/cwt, down $3.00 from a week earlier. September feeder cattle lost $3.70 this week to settle at $143.85/cwt. October feeder cattle closed the week down $3.05 at $141.20/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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