Cattle Outlook: October High For Cattle On Feed

US - USDA's October cattle on feed report said that the number of cattle on feed on 1 October was up 4.9 per cent compared to a year earlier and above year-ago for the 17th consecutive month. This year's 1 October on feed number is the highest for that date since 2006.
calendar icon 31 October 2011
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Ron Plain
Ron Plain

September placements were the highest for that month since 2003. Placements of cattle weighing less than 600 pounds were up 34% in September; placements for all heavier weigh groups were down an average of 8.7 per cent.

The calculated average September placement weight was below year-ago for the sixth consecutive month. The weight pattern implies feeders have pulled ahead on placement dates.

Marketings during October were the highest for that month since 2005. Thru September, the average increase in marketings from the large feedlots survey monthly by USDA is 2.96 per cent. But, steer and heifer slaughter during that same period is down 0.27 per cent.

A little over a third of this discrepancy can be explained by a drop in imports of fed cattle for immediate slaughter from Canada. The rest of the discrepancy appears to be due to an increase in the share of fed cattle in USDA surveyed lots relative to smaller feedlots.

The October on feed report said the number of steers on feed was up 5.1 per cent and heifers on feed were up 4.7 per cent from a year earlier. Heifers made up 39.5 per cent of the animals on feed, the highest percentage for 1 October of any year since 2001. This implies that heifer retention remains low.

Friday morning the choice boxed beef carcase cutout value was $188.21/cwt, up $4.21 from last week and the highest since 20 April. The select carcass cutout was up $2.56 from the previous Friday to $169.83 per hundred pounds of carcase weight. The choice-select spread, $18.38, is the third largest since 14 December, 2006.

Fed cattle prices were steady this week. The 5-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $120.78/cwt, up four cents from last week. Steers sold on a dressed weight basis averaged $190.70/cwt, 10 cents higher than the week before.

This week's cattle slaughter totaled 671,000 head, up 3.1 per cent from the week before and up 0.5 per cent compared to the same week last year.

The average steer dressed weight for the week ending 15 October was 857 pounds, down one pound from the week before and down four pounds from a year ago. This was the second week with steer weights below year-ago since early December.

Cash bids for feeder cattle around the country this week were mostly steady to $5 higher. Prices this week at Oklahoma City were steady with price ranges for medium and large frame #1 steers: 400-450# $155-$167, 450-500# $143-$158.50, 500-550# $142.50-$154.50, 550-600# $139-$150, 600-650# $126.50-$149, 650-700# $124-$149, 700-750# $127-$146.75, 750-800# $138.50-$144, 800-900# $136-$140 and 900-1000# $128-$130.75/cwt.

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