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Beef Exports Down From August, Up From Last Year
USDA has increased its forecast of U.S. beef production. They expect 2016 beef production to be 5.7 percent higher than last year and 2017 to be 4.4 percent higher than this year. They lowered the midpoint of their slaughter steer price forecast to around $120/cwt this year and $106/cwt next year.
The U.S. exported 214.59 million pounds of beef (carcass weight equivalent) during September. This was down 5.9 percent from August, but up 30 percent from a year ago. Most of our major foreign customers increased their purchases compared to September 2015.
September beef imports equaled 219.338 million pounds, down 16.6 percent from August and down 24% from September 2015. The large year-over-year decline is mostly due to a lot less beef from Australia, which is rebuilding their herd after prolonged drought. September beef exports equaled 9.8 percent of U.S. production and imports equaled 10.1 percent of production.
Fed cattle prices were lower this week on moderate sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $102.72/cwt, down $1.75 from last week's average and down $23.55 from a year ago. The 5-area dressed steer price averaged $159.00/cwt, down $3.59 from the week before and down $42.47 from a year ago.
Beef cutout value is lower this week. This morning, the choice boxed beef cutout value was $185.33/cwt, down $3.69 from the previous Friday. The select carcass cutout this morning was $167.79/cwt, down $5.96 from last week. The choice-select spread is quite large at $17.54/cwt
This week’s cattle slaughter totaled 610,000 head, up 0.7 percent from last week and up 9.3 percent from a year ago. The average steer dressed weight for the week ending on October 29 was 917 pounds, up 2 pounds from the week before, down 3 pounds from a year ago, and below the year-ago level for the 26th consecutive week.
Cattle prices were mixed this week at the Oklahoma City auction. Feeder cattle prices were $1 to $3 lower and stocker steers were $2 to $5 higher than last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $136-168, 450-500# $140.50-$162, 500-550# $133.50-$144, 550-600# $123.50-$137.25, 600-650# $117-$133.50, 650-700# $118-$129.50, 700-750# $112.75-$127, 750-800# $115-$129.50, 800-900# $117-$131, and 900-1000# $119-$124.50/cwt.
Cattle futures were higher this week. The December live cattle futures contract settled at $105.60/cwt today, up $2.88 for the week. February fed cattle settled at $106.30/cwt, up $2.00 from the previous Friday. April fed cattle futures settled at $106.10/cwt, up $1.75 from the previous Friday.
Feeder cattle futures also gained ground this week. November feeder cattle futures ended the week at $125.72/cwt, up 10 cents from a week earlier. January feeder cattle gained $3.17 this week to settle at $121.02/cwt. The March contract closed the week at $117.45/cwt, up $2.13 for the week. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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