Weather continues to dictate the direction of cattle markets across the U.S. and will likely prevent herd rebuilding for at least another year.
There was no relief from the heat, drought or poor margins for cattle feeders last week. The cash trade was virtually untested, with packers sticking to lower bids ahead of a holiday-shortened week. USDA noted a handful of trades in Kansas and Texas at $116 per hundredweight, steady with the previous week.
Stocker and feeder cattle traded sharply lower with bad news chipping the market from several directions – drought, higher corn prices and dismal feeding margins chief among them. Steers and heifers over 650 pounds were called $4 to $8 per hundredweight lower with many instances as much as $12 lower in the Northern Plains. Calves under 650 pounds traded fully $5 to $15 per hundredweight lower, and the driest areas reporting lightweights as much as $20 per hundredweight lower.
“Dry weather concerns are to blame for the lion’s share of the extreme downside pressure that has culminated over the past 2-3 weeks with 72 percent of the continental U.S. now rated abnormally dry or worse, compared to just 32 percent last year when the Southwest underwent their historical herd sell-off,” says USDA Market News reporter Corbitt Wall.
“This summer the drought sales are happening all over the Atlas, and despite a considerable effort to retain replacement quality heifers last fall and this spring, herd rebuilding will have to wait for at least another year. Top quality cow/calf pairs and fall calving bred cows are flooding parched markets out west and down in the Ozarks, but buyers are running out of addresses to send these displaced replacements.”
Last week’s auction receipts totaled 175,400, compared to 153,300 the previous week and 19,800 last year. Direct sales of stocker and feeder cattle totaled 34,800 with video/Internet sales at 234,100. The weekly total was 444,300, compared to 287,000 last year.
Slaughter cows were quoted at $4 higher, and bulls at $2 higher. USDA’s Cutter cow carcass cut-out value Friday was $172.11, down 95 cents from the previous Friday. Cash corn prices increased 52 cents per bushel during the week, with Omaha closing at $6.75 per bushel on Friday.
Boxed beef cutout values declined to $194.66, down $1.97 per hundredweight lower than the previous week. Select boxed beef traded at $178.09, down $2 from the previous week. The Choice-Select spread was $16.57 per hundredweight.