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· In The Cattle Markets: Fed Steer Marketings Ramp Up Seasonally
· Fed prices surprisingly strong in April. Will the trend hold?
In The Cattle Markets: Fed Steer Marketings Ramp Up Seasonally
By: David P. Anderson, Texas A&M AgriLife Extension
via Drovers - May 8, 2019
Steer slaughter has begun to ramp up, seasonally, over the last month. Slaughter is up about 9 percent from mid-March to mid-April. The almost 30,000 head per week increase is relatively close to the increase in slaughter seen over the last five years, on average, and last year.
One of the interesting notes in the cattle market over the last year has been the relatively low level of steer slaughter. While the cow herd and the calf crop have continued to grow, steer slaughter over the last 52 weeks is 1.5 percent below the previous 52 weeks. So far this year, steer slaughter is about 2.7 percent below a year ago. Over time, steer slaughter should, roughly, match the growth in the calf crop. Unlike heifers, there’s not much else to do with a steer.
Steer dressed weights normally decline until late May to early June. Weights this year have followed that seasonal pattern, but have been below last year’s weights until the last couple of weeks. Weights averaged 857 pounds for the last reported week, about same as last year. The cattle on feed report has indicated more cattle on feed than a year ago and extremely large numbers on feed longer than 120 days. With some good weather, it’s likely that weights will outpace last year’s level, adding to beef production. The quarterly cattle on feed report did indicate fewer steers on feed on April 1, 2019 than a year ago. But, steer slaughter ramping up seasonally and heavier weights does imply growing beef production into the summer.
Increases in beef production have come from heifer and cow slaughter. Fed heifer slaughter is 11 percent higher than a year ago over the last four weeks, and 9 percent higher for this year. Driven by the financial wreck in the dairy industry, dairy cow slaughter has been the highest since the dairy herd buyout days of the 1980s, at over 70,000 head per week in March. Dairy cow slaughter has finally resulted in milk production falling below a year ago providing some hope for higher milk prices.
Over the next few weeks watch for increasing steer slaughter and increasing steer and heifer dressed weights. Reduced dairy cow slaughter and higher cow beef cutout values may provide some hope for higher cull cow prices in coming weeks.
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Fed prices surprisingly strong in April. Will the trend hold?
The May fed market is pressured by looming larger supply of fed cattle.
Nevil Speer, BEEF Magazine
May 08, 2019
Well, it wasn’t a new high….but it darn sure got close. Either way, it’s not one week, or one price, that really matters – it’s the broader trend that makes a difference. To that end, April proved to be remarkably resilient, especially given it all started on a softer note.
Recall that March fed cattle prices ended with a $2-3 per cwt slide, and then April opened down another $1. It seemed April’s market was certain to be fighting softer prices on the way to summer lows – it was just a matter of how that fight took shape. But as noted last month, there was also still some hope for better prices.
Sure enough, fed trade caught some tail winds. The market fought its way back to $126 per cwt and then to $128 (weighted average) during the middle weeks of the month. The month closed on an uneven note as prices ranged widely during the week but still managed to average $126-127.
As such, April was a very good month and solidified stronger fed prices on a year-over-year basis. The April fed market averaged $6 per cwt ahead of last year.
Moreover, fed trade through the end of April has averaged nearly $126 per cwt, versus fed cattle bringing just north of $124 in 2018. Best of all, those better prices have come against slightly larger kill volume and beef production compared to the same period last year. May started with a weekly kill of 670,000 head – the largest single-week throughput since fall 2011.
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