Beef Market Advisor

Friday, September 03, 2004

Cattle Outlook

Glenn Grimes & Ron Plain,
University of Missouri - Columbia
September 3, 2004

Cash fed cattle prices continued under pressure this week with the
5-market-area live price pushed down to $80.20 per cwt
down, $2.46 per cwt for the week through Thursday from a week
earlier. Carcass prices for the 5-market-area were down $3.32
per cwt at $127.90 per cwt.

Beef prices were substantially lower for the week. The Friday
morning Choice cutout value was $131.86 per cwt, down $5.58
per cwt from a week earlier. For the week, Select beef was down $4.96
per cwt at $126.29 per cwt Friday morning.

Cash feeder cattle prices also lost some of their bloom with
feeder steer and heifer prices $2-4 per cwt lower this
week at Oklahoma City than a week earlier. Steer calves less than
600 pounds were $5-10 per cwt lower and heifer calves were
$2-4 per cwt lower than 7 days earlier at Oklahoma City.

Fed cattle marketings are not current based on choice beef
prices. This Friday morning choice 600-750 pound
carcasses carried a premium of $1.80 per cwt to choice 750-900 pound

Prices for medium to large frame no. 1 steers at Oklahoma
City this week by weight groups were: 400-500#
$124.00-150.50 per cwt, 500-600# $113.75-126.75, 600-650# calves
$110-121.25, 700-750# calves $112.50-113.75, 600-700#
yearlings $120-125, 700-800# $110.00-120.50, and 800-1,000#
$103.00-114.00 per cwt.

The current premium for replacement cows to slaughter cows
supports the belief that the beef cow-calf industry has
started increasing the cow herd. This week at Oklahoma City some
4-5 year old cows, bred 6-8 months, average to high quality
blacks sold from $1,000-1,060 per head. These cows weighed
1,100-1,300 pounds. Cows 2-7 years old weighing 950-1,350
pounds, bred 2-8 months, average quality black sold from $900-1,000
per head. We have heard reports that some cow-calf pairs
in Missouri sold for more than $1,500 per pair.

Very little information is being publicized about Japan
opening their borders to beef imports from the US and Canada.
We expect our border with Canada being opened quite quickly after
Japan starts importing beef from the US.

When this happens, it will be positive to fed cattle prices
but negative to feeder cattle prices in the US.

Beef exports in total keep moving up some but are still
quite small. Our beef exports in June were up 15% from May
but were still down 82% from June 2003.

Feeder cattle imports from Mexico in June were up nearly 84%
from a year earlier. Feeder cattle imports for
January-June were up 17.2% compared to the same period last year.
However, total cattle imports were down 39.2% for the
first 6 months of 2004 compared to 2003 because of the ban on live
cattle imports from Canada.

Cow slaughter since the first of July through the week
ending August 21 was down 19.2% from the same period in 2003.
Beef cow slaughter for this period was down 21.2% and down-cow
slaughter was down 16.1% compared to a year earlier. These
data are for US domestic cow slaughter and are additional evidence
that producers have started building their breeding herd.

If beef demand does not weaken materially, there is reason
for hope that cattle prices will be generally strong for
several years.

Slaughter this week under Federal Inspection was estimated
at 640 thousand head---not comparable to last year because
we celebrated the Labor Day holiday this week in 2003.

posted by Dr. Harlan Hughes 2:26 PM [edit]

Wednesday, September 01, 2004


Source: Western Livestock Information Center; Denver Colorado

U.S. cattle feeders have made profits on slaughter cattle sold in
recent months. But, feeders will more than likely face a flow of red ink
for the balance of 2004 as estimated breakevens far exceed projected fed
cattle prices.

After being in the red during early 2004, cattle feeding returns turned positive in May and remained in the black throughout mid August. Steers placed as yearlings (700 to 800 pounds) in commercial
feedlots in the Southern Plains region and sold in May posted profits near
$65.00 per head.

Steers sold during the month of June averaged profits of
about $98.00 per head, but fell into the low $20's per head in July.

In terms of profit, closeouts in May will probably be the best for this
year as profits are expected to erode in the fall quarter.

Fed cattle prices are expected to moderate this fall, which coupled with strong feeder
cattle prices this summer will cause higher breakeven sale prices to

For feeding a 750-pound steer in the Southern Plains, steer
breakeven sale prices for August are estimated at about $85 per cwt.

In September, estimates are around $91 per cwt. and then will increase to the
high $90's per cwt. for the months of October through December.

Current estimates for fed cattle prices in the fourth quarter are in the $85 to $89
per cwt. range.

Cow-calf producers, on-the-other-hand, have been benefiting from well
above year ago calf prices.

Livestock Marketing Information Center (LMIC) updated estimates put cash
returns (cash income less cash costs plus pasture rent) for cow calf producers
in the Southern Plains for calendar year 2004 in the $91.00 to $92.00 per head range,
which would be an all time record since the LMIC series began (1974).
The last time cow calf producers saw near this level was in 1987 (estimated
at about $88 per head

posted by Dr. Harlan Hughes 8:42 AM [edit]

Tuesday, August 31, 2004


Cattle producers competing in today's complex beef market need to utilize all the management tools available to reduce guesswork and add predictability to beef cattle herd performance, says Kris Ringwall, livestock specialist with the North Dakota State University Extension Service.

One critical management tool is the standardized production and financial performance analysis (SPA), Ringwall says. This analysis was developed through an effort of the National Cattlemen's Association, the National Integrated Resource Management Coordinating Committee and extension specialists.

CHAPS (cow herd appraisal performance system) III is a computer cow performance record system designed to provide vital information about managerial decisions for individual animals, overall herd performance and a SPA analysis.

The CHAPS program was developed in North Dakota. At present, extension services from land-grant universities in 23 states are involved in the CHAPS network.

In addition to the SPA herd performance measures, CHAPS III provides all standard performance data and parentage information on each calf. A separate sire summary is included, and reproductive data and most probable producing ability (MPPA) values are calculated for all cows within the herd.

Several managerial reports are available in the herd summary. The reproductive analysis includes the percentage of cows calving, calf survival, herd open and abortion rate and percentage of cows weaning calves. The calving distribution report includes calves born by 21-day intervals, average calving date by cow age, average weaning weight by 21-day intervals, and average weaning weight by cow age.

The overall growth report includes total and average actual pounds produced at weaning, herd calving interval, herd uniformity score based on calf weight and herd average birth weight, and weight per day of age. The last managerial report summarizes annual cow culling based on the number of cows that died or were sold due to age, physical defects, poor fertility, inferior calves or as replacement stock.

CHAPS III includes a SPA production printout that allows a producer to focus on factors that are critical to a commercial cow-calf enterprise. A producer's goals and actual herd performance are evaluated and compared to SPA benchmarks set for each trait.

The current SPA production benchmark values were calculated utilizing North Dakota Beef Cattle Improvement Association records for 58,946 calves from 93 herds processed through the CHAPS III program over the last five years.

North Dakota producers can be proud of the production records they have compiled, Ringwall says. These include a pregnancy percentage of over 93 percent of females exposed, with a pregnancy loss of only 0.6 percent and a calving percentage of 92.8 percent. Calf death loss average is 2.5 percent, with a calf crop or weaning percentage of 90.3 percent of exposed females.

The North Dakota CHAPS herds had nearly 57 percent of the calves born during the first 21 days of calving, 84 percent in the first 42 days, and almost 95 percent in the first 63 days.

Heifers follow a different man-made pattern. Since a general practice is to calve the heifers before the mature
cows, The heifers are blended into the mature cow calving season, using the mature cows as the base. Typically 34 percent of the heifers calve before the start of the mature cows, with 69 percent calved out by the end of first 21 days of calving mature cows and 85 percent calved out by the end of 42 days of calving mature cows.

Interestingly, even with a jump-start for heifers, after
42 days of ca1ving (using the mature cows as the base), only 85 percent of the cows are calved out, regardless of first calf heifer status or mature cow status. In the end, cows need to conceive and carry a successful pregnancy; Typically, in this part of the country just over 93 percent of the cows actually conceive, with fewer than 93 percent successfully carrying the
pregnancy to term. Reproduction in most herds is monitored twice a year: in the fall, when typically 6.6 percent of open cows were sold, and in the spring when dry cows are sold.

Average age at weaning is 194 days, with actual weaning weights averaging 548 pounds for steers, 521 pounds for heifers and 575 pounds for bulls, or an average overall weaning weight of 548 pounds. This calculates to 500 pounds of weaned calf per female exposed to breeding.

Ringwall calls these benchmark figures impressive but achievable. "Progress through performance is what CHAPS III is all about," he says. "Additional knowledge about your herd's performance can add predictability to management decisions."

Producers can find out about participating in the CHAPS III system by accessing or by contacting Kris Ringwall at 701-483-2045. CHAPS is made available to cattlemen by the North Dakota Beef Cattle Improvement Association, with Kris Ringwall as the executive director. In addition, Kris is also Director of the NDSU Dickinson Research Center.

posted by Dr. Harlan Hughes 4:46 PM [edit]

Monday, August 30, 2004


Source: Western Livstock Market Information Center, Denver Co.

High U.S. cattle prices have continued to pull Mexican feeder cattle north. For the month of June, U.S. cattle imports from Mexico totaled 101,335 head. That was 46,144 thousand head or 84 percent larger than a year ago.

On a monthly basis, imports of cattle from Mexico have been considerably above 2003’s since February. Typically, cattle imports from Mexico moderate during the summer months and then increase into the fall. However, since cattle imports have been running at well above year ago levels, the typical fall run-up may be a little smaller than a year ago.

Nonetheless, the larger number of live cattle imports from Mexico, still does not make up for the lack of feeder cattle imports from Canada. That is, total U.S. feeder cattle imports continue to run well below a year ago and normal.

posted by Dr. Harlan Hughes 9:43 PM [edit]

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