Cattle Outlook: Future Meat Demand Looking Negative

US - According to the Bureau of Labor Statistics, the US economy added no jobs during August. The economy appears to be very weak and that should impact negatively on future meat demand, writes Ron Plain.

5 September 2011

2 minute read

North America

Ron Plain

Boxed beef prices were lower this week. Friday morning the choice boxed beef carcase cutout value was $181.58/cwt, down $5.04 from last week. The select carcase cutout was down $7.38 from the previous Friday to $173.04 per hundred pounds of carcase weight.

Fed cattle sales were very slow this week. Through Thursday, sales of only 7,235 head were reported in the five-area total, down from 117,996 head a week earlier.

The five-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $112.72/cwt, down 23 cents from last week.

Steers sold on a dressed weight basis this week averaged $177.18/cwt, $2.94 lower than the week before. This week in 2010 live steers averaged $96.45/cwt while dressed prices averaged $152.69/cwt.

This week's cattle slaughter totaled 661,000 head, down 1.6 per cent from the week before and down 1.8 per cent compared to the same week last year.

The average steer dressed weight for the week ending 20 August was 849 pounds, up three pounds from the week before, nine pounds heavier than for the same week in 2010, and above year-earlier for the 37th consecutive week.

The severe drought in the southern plains is pushing a lot of cows to slaughter. Over the last six weeks beef cow slaughter is up over 20 per cent compared to a year ago. Regional slaughter data imply that all of the increase in beef cow slaughter is in the southern plains.

Cash bids for feeder cattle around the country this week mostly ranged from steady to six dollars lower than the week before.

Oklahoma City auction prices this week were an outlier at steady to three dollars higher with price ranges for medium and large frame number one steers: 400-450# $145-$158, 450-500# $140-$157.50, 500-550# $138.50-$149.50, 550-600# $138-$146, 600-650# $140.25-$146, 650-700# $137-$142, 700-750# $135.50-$139, 750-800# $134.50-$138.50, 800-900# $130-$132.50 and 900-1000# one group of 16 head at $122.50/cwt.

The October fed cattle futures contract ended the week at $114.80/cwt, down 40 cents from last week's close. December cattle lost 63 cents to end the week at $116.47/cwt. February live cattle settled at $119.80/cwt, down 60 cents from the previous Friday.

Corn futures ended the week slightly lower than the previous Friday.

The September feeder cattle contract lost 62 cents for the week to end at $132.65.