Feeder cattle slipped into full decline last week as auction and direct prices were $3 to $6 per hundredweight lower. Stocker cattle and calves traded $3 to $10 per hundredweight lower as green grass in the major grazing areas remains a few weeks away.
Mother Nature continued to dampen the spirits in cattle country with unseasonably cold temperatures and a major early-spring snowstorm over the weekend. As a result, demand has softened for the historically tight supplies of stocker and feeder cattle. Regional weighted average prices for all classes are fully $20 to $25 per hundredweight lower than at the same time a year ago.
“There was still no sign of solid footing in the market this past week, and if cattle feeders continue to figure breakevens on current feed costs the market still has a ways to fall,” says USDA Market News reporter Corbitt Wall. “Feedlot operators are now certain that they cannot show a profit with $7 corn as the feed bill on full-tenured closeouts can easily surpass $750 per head.”
Drought worries plagued the markets all winter, but recent late-winter and early-spring storms have provide enough moisture to “at least kick-start pastures,” Wall says. Still, “extremely tight availability of feeder cattle is currently being coupled with light demand, which completely goes against even the most basic of economic lessons.”
Last week’s auction receipts totaled 224,100, compared to 267,300 the previous week and 208,200 last year. Direct sales of stocker and feeder cattle totaled 51,400 with video/Internet sales at 5,400. The weekly total was 280,900, compared to 239,800 last year.
Fed cattle traded $2 per hundredweight lower last week at $124 to $125.50. Dressed sales in Nebraska traded $3 per hundredweight lower at $198. Beef demand has not experienced a spring surge as cooler-than-normal temperatures – especially along the East Coast – keeps patio grills in moth balls.
Boxed beef prices were lower last week. Choice boxed beef declined $3.83 on the week to close Friday at $191.43. Select boxed beef was down $1.65 for the week to close at $192.28. The Choice-Select spread moved into negative territory at - $0.85.
Slaughter cows and bulls sold steady to $2 lower on a live basis at auction. USDA’s Cutter cow carcass cut-out value Friday morning was $171.97 per hundredweight, up $0.92 from the previous Friday.
USDA’s March cattle on feed report released Friday confirmed the ever-tightening supply of feeder cattle. The on feed total was 10.9 million, 93 percent of last year. Placements totaled 1.48 million, down 14 percent from last year, and marketings totaled 1.64 million, down 7 percent.