U.S. cattle prices were record high in 2011 and a good portion of the credit goes to international trade. The U.S. exported more beef in the first 11 months of 2011 than in any previous calendar year. Through November, 10.6% of U.S. beef production was exported. The three biggest growth markets for U.S. beef exports are Canada (up 106 million pounds compared to January-November 2010), Japan (up 99 million pounds) and South Korea (up 97 million pounds).

U.S. beef imports during the first 11 months of 2011 were down 11.9% compared to a year earlier. Shipments from Canada were down 21.2%, imports from Australia down 23.1% and Brazil down 40.0%. Through November, beef imports equaled 7.9% of U.S. beef production.

Cattle imports during November were down 7.7% compared to 12 months earlier. During the first 11 months of 2011, cattle imports were down 10.3% with cattle from Canada were down 36.3% but imports from Mexico were up 14.2%. When the totals for 2011 are in, imports of cattle are likely to be close to 2 million head, down 10% from 2010 and the lowest since 2005.

Beef cutout value was lower for the third consecutive week. On Friday morning, the choice boxed beef carcass cutout value was $181.44/cwt, down $2.78 from last week to the lowest level since September 9. The select carcass cutout was down 34 cents from the previous Friday to $175.31 per hundred pounds of carcass weight. The choice-select spread, $6.14, was down $2.44 from a week earlier to the lowest level since August 23.

Despite the lower cutout, fed cattle prices were higher this week in light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $125.68/cwt, up $2.02 from last week, $19.87/cwt above the same week last year, and the highest of record. Steers sold on a dressed weight basis this week averaged $202.70/cwt, which is the second highest ever and an amazing $21.26/cwt above the cutout value of choice carcasses.

This week’s cattle slaughter totaled 628,000 head, down 3.8% from the week before and down 1.7% compared to a year ago. The average steer dressed weight for the week ending January 7 was 851 pounds, up 4 pounds from the week before, but down 1 pound from a year ago.

Feeder cattle prices this week across the country were steady to $8 higher than last week. The Oklahoma City auction prices were steady with the ranges for medium and large frame #1 steers: 400-450# $197-$210, 450-500# $180.50-$188.50, 500-550# $169-$183, 550-600# $164-$177, 600-650# $152-$162.50, 650-700# $140-$157.50, 700-750# $148-$155.25, 750-800# $144.50-$152, 800-900# $137.75-$146, and 900-1000# $128.25-$136.50/cwt.

The February live cattle futures contract settled at $124.55/cwt today, up $2.08 compared to last Friday. The April contract closed at $127.72/cwt, up $1.32 for the week.

Source: Ron Plain