Beef Market Advisor

Saturday, October 23, 2004

U.S. & Japan Joint Statement For The Resumption Of Trade


On October 21, 22 and 23, 2004, the Government of the United States (USG) and the Government of Japan (GOJ) held Director-General level consultations in Tokyo on the resumption of beef trade between the two countries. During the meetings, the GOJ explained the review process of domestic measures against BSE. The USG explained their domestic measures taken against BSE and presented basic ideas for the resumption of two-way beef trade.

For this and related stories, click

posted by Dr. Harlan Hughes 9:39 AM [edit]

Friday, October 22, 2004

U.S. Meat And Poultry Supplies Record Large

Source: BEEF Cow/Calf Weekly 22 Oct 04

According to Lakewood, CO-based LMIC (Livestock Marketing Information Center), per capita U.S. meat and poultry supplies will set a new record in 2004, and is likely to set a new record again in 2006. At first glance, this sounds a little askew with U.S. beef production numbers being very tight. However, with the loss of our export markets all that product that was being sent overseas must now be consumed domestically. This is also the case for poultry exports which are at their lowest levels since 1995 because of market disturbances.

Once again, LMIC's numbers validate how demand and not supply has been driving the record cattle prices that have been enjoyed over the last 12 months. The LMIC projects U.S. retail weight consumption of red meat and poultry will be about 222.4 lbs. in 2004, exceeding the previous record set in 2002 by about 1.6 lbs. That number may decline slightly in 2005 before increasing to about 223 lbs. in 2006.

posted by Dr. Harlan Hughes 6:18 PM [edit]

Weekly Cattle Outlook

By Glenn Grimes & Ron Plain,
University of Missouri - Columbia
October 22, 2004

Packers increased their bids about $2 per cwt on Friday of last week
which resulted in good cattle movement. A few cattle moved in early
week this week at $86 per cwt. However, by mid week the cattle that
moved were in the $83 to 84 level.

For the week through Thursday the average weighted price for the 5
market area was $86.03 per cwt up $2.81 per cwt from a week earlier.
The weighted average carcass price for the first four days of the
week for the 5 market area was up $355 per cwt at $134.25 per cwt.

Packers were able to move beef prices higher for the week. This
Friday morning, yield 3, choice wholesale beef prices was $140.75
per cwt up $4.35 from a week earlier. Yield 2-3, select beef at
$134.67 per cwt was also up by $3.44 per cwt from seven days

Feeder steer prices this week at Oklahoma City were steady but
feeder heifer prices were $1 to 3 per cwt higher than last week.
Calf prices were $3 to 8 per cwt higher than seven days earlier at
Oklahoma City.

The prices for medium and large frame number 1 steers by weighted
groups at Oklahoma City this week were: 400-500 pounds $129 to 152
per cwt, 500-600 pounds $115 to 136.50, 600-700 pound calves $108 to
118.75, 700 to 770 pound calves $100 to 109, 600-700 pound yearlings
$115.50 to 119.50, 700-800 pounds $113 to 118, 800-900 pounds 106 to
114.50 per cwt.

Total cow slaughter continues to run below a year earlier. For the
four weeks ending October 9th, total cow slaughter was down 18.2%
from a year earlier. Dairy cow slaughter for this period was down
23% and beef cow slaughter was down 13.6%.

The probabilities are high that the US has started a build-up in the
cow herd. Certainly feeder cattle prices are high enough to provide
this incentive with 400-500 pound steers calves up $25 to 30 with a
top of $152 this week and 700-800 pound yearlings up $8 to 10 at a
top of $118 this week compared to a year earlier.

Cattle slaughter last week was above a year earlier for the first
time in over a year. Slaughter of cattle this week at 641 thousand
head under Federal Inspection was down 2.4% from a year earlier.

Discussion between Japan and the US continues about opening Japan's
market to the US for beef but still no breakthroughs.

The US Commerce Department ruled last week that Canada was guilty of
dumping live hogs on the US market. We doubt this will have much if
any impact on the US market in the short run even though there will
be a tariff of about 14% on most feeder pigs and slaughter hogs from

The number of cattle on feed October 1, was up 3% from a year
earlier. Placements of cattle on feed during September were down 4%
from a year earlier. Marketings of fed cattle during September were
down 11%.

Harlan's Editorial Comment: For a look at Harlan's
Long-Run Planning Prices, go to and scroll
down the page to the Planning Price Charts and Tables.

posted by Dr. Harlan Hughes 5:39 PM [edit]

Thursday, October 21, 2004

Some Observations Over The Last Cattle Cycle

Despite the popularity of questions on the relationship of breed, cow size,

calving date, and vaccination programs on beef cow profitability, the most dominate

profit generating factor is not breed of cows, size of cows, color of cows, a specific

calving time, and not a specific herd vaccination program. The most common key to

profitability is management intensity.

Just collecting more management data does not, by itself, increase profits. if

profits are going to be increased, the collected data must be thoroughly analyzed and

routinely utilized when making management decisions.

IRM Cooperators taught me that during high price times, big cows that produce big

calves generate big profits. During low price times smaller cows producing smaller

calves generate the bigger profits. No one cow size is optimal over a complete cattle

cycle. Ranch resources, not economics, should dictate the optimal cow size for that


posted by Dr. Harlan Hughes 1:42 PM [edit]

Wednesday, October 20, 2004


Between 1988 and 1993, the value of beef loins and ribs increased 3% and 4%, respectively, while the value of chucks and rounds decreased 24% and 25%. Compounding this decline, the chuck and round average making up 69% of total carcass weight.

The Cattlemen’s Beef Promotion and Research Board sought to change this with the creation of the Beef Value Cuts program in 1995. Part of that program involved identifying specific muscles in lower valued cuts that could be marketed at higher prices. This led to such new cuts as the flat iron steak from the chuck.

Since 1998, the value of the chuck has increased 60%, and of the round by 32%. That accounts for almost half of the increased demand growth for beef. (BEEF magazine Stocker Trends, Sept. 20, 2004)

Source: Dr. Steve Hammack, Professor and Extension Beef Cattle Specialist Emeritus October 2004 Newsletter

posted by Dr. Harlan Hughes 4:52 PM [edit]

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