USDA’s October cattle on feed report said that placements in September were down 18.8% and marketings were down 11.5% compared to a year ago. There were two fewer slaughter days this September than last. The number of cattle in large feedlots at the start of October was down 2.6%. Although down from last year, the on-feed number is the second highest for October since 2006. The trade had predicted the on-feed number would be down 2.2%.
The average price of choice beef in grocery stores during September was $4.941 per pound. That was down 0.4 cents from August, up 2.7 cents from September 2011, and above year-earlier for the 31st consecutive month. The average price of slaughter steers during September was $125.10/cwt, up $4.80 from the month before and up $7.60 from a year earlier.
Retail beef demand during August was up 1.5% compared to a year ago. Thus far in 2012, April is the only down month for domestic beef demand. Export demand for U.S. beef was down 14.4% in August. Export demand has been down every month this year. Fed cattle demand was down 2.2% in August.
Fed cattle prices were higher this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.72/cwt, up $1.64 from last week and up $3.98 from the same week last year. Steer prices on a dressed basis averaged $195.25/cwt this week, up $3.19 from a week ago and up $4.65 from a year ago.
Beef carcass cutout values were higher this week. On Friday morning, choice boxed beef carcass cutout value was $196.80/cwt, up $5.35 from last Friday and up $12.80 from a year ago. This week select carcass cutout was up $2.90 from the previous week to $180.37/cwt. The choice-select spread is $16.43/cwt, the widest since July 6.
Cattle slaughter totaled 634,000 head this week, up 0.5% from the week before, but down 3.2% from the same week last year. The average steer dressed weight for the week ending October 6 was 880 pounds, up 7 pounds from the week before and up 22 pounds from a year ago. This was the 39th consecutive week steer weights have been above the year-earlier level. Year-to-date cattle slaughter is down 4.1%.
Oklahoma City auction cattle prices were steady to $2 higher this week. Prices for medium and large frame #1 steers: 400-450# $173-$196, 450-500# $167-$195, 500-550# $154-$171, 550-600# $140-$161, 600-650# $142.50-$154.25, 650-700# $134-$151, 700-750# $133-$149.85, 750-800# $128-$147.10, 800-900# $131-$143.25, and 900-1000# $129/cwt.
The October live cattle futures contract settled at $126.30/cwt, up $#2.40 from the previous Friday. December cattle closed at $127.27/cwt, up $1.77 for the week. February fed cattle contracts settled at $131.00/cwt. October feeder cattle futures ended the week at $146.15/cwt, $4.05 higher than last Friday.
Source: Ron Plain and Scott Brown