USDA has proposed opening U.S. markets to beef from certain states in Brazil that are free of foot and mouth disease. FMD is controlled in Brazil through vaccination. The proposed change will make many in the U.S. beef industry nervous. Brazil is the world's largest beef exporter and has the potential to become a big supplier to the U.S. Being FMD free is a huge asset the U.S. has in world meat trade. Anything that might possible jeopardize our FMD status is worthy of opposition.

Fed cattle prices set new records this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $137.46/cwt, up $6.46 from a week ago and up $11.15 from a year ago. Steer sales on a dressed basis averaged a record $217.06/cwt this week.

This morning, the boxed beef cutout value for choice carcasses was $202.27/cwt, up $5.19 from the previous Friday and up $7.45 from a year ago. The select carcass cutout is $197.37/cwt, up $6.37 for the week and up $15.22 from the same day last year.

Packer margins are very tight. Either beef cutout has to keep climbing or fed cattle prices soften.

This week's cattle slaughter totaled 521,000 head, up 21.4% from last week and up 0.4% from the corresponding week last year.

The average steer dressed weight for the week ending on December 21 was 871 pounds, down 1 pound from the week before and down 2 pounds from a year earlier. For the year, steer carcass weights averaged more than 4 pounds above the 2012 level.

There was no feeder cattle sale at Oklahoma City this week. Feeder cattle prices at this week's Joplin Stockyards auction were $3 to $10 higher than before Christmas. Prices for medium and large frame #1 steers by weight were: 400-450# $212.50-$227.50, 450-500# $200-$213, 500-550# $187-$205, 550-600# $178-$194.60, 600-700# $168-$184, 700-800# $161-$173.75, 800-900# $158.10-$165.50, and 900-1000# $149-$158/cwt.

The February live cattle futures contract closed at $136.30/cwt today, up $1.35 from last week's close. April fed cattle settled at $136.57, up 95 cents for the week. June settled at $130.05/cwt, up 50 cents.

The January feeder cattle futures contract ended the week at $167.62/cwt, up 62 cents for the week. March feeders closed at $168.10/cwt, which was 30 cents higher than the previous Friday.