25 January 2010

3 minute read

North America

Ron Plain

Unfortunately, there is no sign of a turnaround in domestic beef demand. The average price of choice beef at retail during December was $4.285 per pound. That was 0.7 cents lower than in November and nine cents lower than in December of 2008. For all of 2009, choice beef at retail averaged $4.26/pound, 6.5 cents lower than in 2008. Despite costing less than in 2008, US per capita beef consumption last year was only 61.4 pounds, down 1.3 pounds compared to 2008. When both price and consumption are down, there is no doubt as to which way demand is headed.

Cattlemen and beef processors saw less money in 2009 while the margins for distribution/retailing expanded. The 5-area live price for fed steers averaged $83.50/cwt in 2009, down $9.51 from the year before. The farm to wholesale margin was 1.5 cents lower last year than in 2008. The wholesale to retail margin grew by 11 cents compared to 2008.

The one bit of good news for beef demand is that export demand may be headed up. Wholesale beef prices were 11 per cent lower in November 2009 than a year earlier. November beef exports were up 27 per cent compared to 12 months earlier which is much more of an increase than one would expect from an 11 per cent decline in price. But, one month does not make a trend.

Choice boxed beef cutout values moved lower this week. On Friday morning, the choice carcase cutout value was $1.4355/pound, down 1.69 cents for the week and 4.64 cents lower than a year ago. The select cutout was down 1.34 cents from the previous Friday to $1.395 per pound.

Fed cattle prices were little changed this week. The 5-area daily weighted average price for slaughter steers sold through Thursday on a live weight basis was $84.30/cwt, down 67 cents from a week earlier but $2.39 higher than a year ago. Steers sold on a dressed basis averaged $138.41/cwt, $1.50 higher than the week before and $6.60 higher than the same week of 2009.

The February live cattle futures contract ended the week at $86.62/cwt, down 73 cents for the week. April settled at $90.55, up 3 cents from the week before. June settled at $88.30/cwt and the August live cattle contract ended the week at $87.80.

Federally inspected cattle slaughter for this week is 665,000 head, up 3.6 per cent compared to a year ago. Steer carcase weights have been below year-earlier levels for 10 of the last 11 weeks.

Cash bids for feeder cattle were mostly steady to higher this week. The price ranges at Oklahoma City for medium and large frame steers were: 400-450# $120.50-128.50, 450-500# $115-122.50, 500-550# $107.50-$116.50, 550-600# $104.25-$114.50, 600-650# $96.75-$103.75, 650-700# $97-$101, 700-750# $95-$99.75, 750-800# $95-$97.75, and 800-1000# $88.50-$95.75/cwt.

Feeder cattle futures moved higher this week. The January contract ended the week at $97.10/cwt, down 87 cents from last Friday. March settled at $99.60/cwt.

TheCattleSite News Desk