Beef Market Advisor

Friday, August 27, 2004

Cattle Outlook

Glenn Grimes & Ron Plain,
University of Missouri - Columbia
August 27, 2004

The number of cattle on feed in feedlots with 1000 head or more one
time capacity was up 2.7% on August 1.

Placements of cattle on feed during July was down 13.9% from 12
months earlier and fed marketings during July was down 15.2%. The
placements and marketings on a daily basis were not down quite as
much as indicated above because we had 1 less week day in July of
2004 than in 2003.

The weights of cattle placed on feed during July continue to run
below a year earlier. The number of cattle placed on feed in July
weighing less than 600# was up 3.3%, cattle placed on feed weighing
600-699# was down 21.5%, the number placed weighing between 700-799#
was down 15.9% and the number weighing over 800# was down 19.1% from
12 months earlier.

Placing cattle on feed at lighter weights results in smaller
marketings relative to the number on feed. Therefore, we can expect
marketings in the future to continue to run below a year earlier and
smaller relative to the number on feed.

No new announcements or rumors as to when the Canadian border will
be opened to live cattle imports into the US. The same is true as
to the ban on beef exports from the US to several countries,
including Japan.

Demand for beef at the retail level continues to be very strong.
Our demand index mid point estimate shows a growth of 7.7% for
January-July compared to a year earlier.

However, due to wider marketing margins, due mostly to the added
cost of killing cattle since finding the one cow with BSE and the
lower by-product values because of the export ban, the demand for
live fed cattle for January-July was down 5.6% from the same months
in 2003.

Demand at the consumer level continues very strong for all meats for
the first 7 months of 2004. Pork was up 3.1%, broilers up 3.6% and
turkey up 1%.

Feeder steer prices at Oklahoma City this week were steady to $2
higher per cwt. Feeder heifers and steer and heifer calves were
steady with 7 days earlier.

The prices by weight groups at Oklahoma City this week for medium
and large frame no.1 steers were: 400-500# $131.50-157 per cwt,
500-600# $118.50-145.50, 600-700# calves $114.50-124, 600-700#
yearlings $122.75-129.75, 700-800# $115-125, and 800-1000#

Cash fed cattle prices came under pressure this week as packers
strived to improve their margins. The weighted average live price
for 5 market area at $82.66 per cwt was down $4.34 per cwt from last
week through Thursday. The average weighted carcass negotiated
price was down $5.38 per cwt at $131.22 per cwt.

The range in live prices in the Midwest direct trade was $80.00 to
83.50 with a weighted average of $82.70. The range in prices for
the high plains was $N/A to N/A with a weighted average of $N/A per

Wholesale beef prices showed modest decline for the week. The price
of Yield 3 Choice beef in morning trade Friday was $137.44 per cwt.
The price for Yield 2-3 Select beef was $131.25 per cwt.

Cattle slaughter under Federal Inspection was estimated at 623
thousand head --- down 15.2% from a year earlier.

posted by Dr. Harlan Hughes 1:11 PM [edit]

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