Cattle and beef markets moved significantly lower last week as consumer demand continued to soften with the fallout from the lean fine-textured beef (LFTB) controversy. But LFTB wasn’t the only factor pulling markets lower. Nearby cattle futures contracts have declined $12 to $14 over the past month, and cash fed cattle prices have answered with an $8 per hundredweight drop of their own.
Cash fed cattle prices were quoted $3 per hundredweight lower last week at $122 to $123 in the North and mostly $122 in the South. Dressed sales in Nebraska were $8 to $9 per hundredweight lower at $193 to $194.
Boxed beef cutout values fell sharply lower for the second consecutive week. Choice boxed beef traded Friday at $177.61 per hundredweight, a decline of $5.75 from the previous Friday, and down $9.80 per hundredweight from two weeks ago. The Select price on Friday was $175.30, a decline of $7.10 from last week and $11.27 lower than two weeks ago. The Choice-Select spread was $2.31, compared to $0.97 last Friday.
Both feedyards and beef packers are reporting significant losses on every animal marketed.
Stocker and feeder cattle were not immune to the market’s decline as they had been earlier in the year. Prices for stocker and feeder cattle were called $4 to $10 per hundredweight lower, with significant pressure on calves under 500 pounds.
A softer feeder cattle market is at least partly the result of declines in the fed cattle market, and USDA Market News reporter Corbitt Wall says feedyard “alleys are full of cattle that wash in the mid $130s and the hope of feed cost relief does not appear to be developing. The fastest way to improve breakevens is to pay less for feeder cattle and yearling orders were whittled-down early this week as even Monday auctions felt the full brunt of the market drop. Still, Wednesday specials at Midwestern salebarns at Green City, MO and Bassett, NE showed little (if any) weakness as farmer feeder interest kept price levels inflated.”
Last week’s auction receipts totaled 206,800, compared to 196,400 the previous week and 266,600 last year. Direct sales of stocker and feeder cattle totaled 36,000, with video/Internet sales at 14,900. The weekly total was 257,700, compared to 334,200, a year ago.
Slaughter cows sold steady to as much as $2 higher, mostly on extremely tight supplies. Corn prices recorded a significant rally last week, with Omaha cash corn at $6.67 per bushel on Friday, 55 cents per bushel higher than the previous week.