Feedyards and packers were locked in a standoff last week, resulting in a light trade mostly $2 per hundredweight lower. Stocker and feeder markets were unfazed by the growing tensions between packers and feeders as auction and direct prices marched higher.
Fed cattle traded in the North at $127 live and $200 to $201 on a dressed basis. Trade in southern feedyards was near a standstill most of the week, but a few cattle moved in Texas late Friday at $129 per hundredweight.
Boxed beef cutout values were sharply higher for the week, with the Choice cutout closing at $197.42 on Friday, a gain of $6.97 per hundredweight for the week. Select cutout traded at $193.40, a gain of $7.50 per hundredweight. The Choice-Select spread narrowed 53 cents for the week to $4.02.
Packers saw margins improve slightly for the week, but their struggles continue. Tighter fed cattle supplies over the coming weeks will strengthen feedyards’ resolve for higher prices. Analysts expect the spring highs to come earlier than historical trends.
Seemingly oblivious to the struggles in other sectors, stocker and feeder markets continued climbing higher last week. Greatest demand was noted on the lightest calves. Feeder cattle were called $1 to $4 per hundredweight higher, with calves $3 to $10 per hundredweight higher.
“The sharpest gains were noted on pee-wee calves (under 450 lbs) in the Southeast as backgrounders near the major central US grazing regions are calling their favorite southern order buyer, after exhausting attempts to purchase lightweights closer to home,” says USDA Market News reporter Corbitt Wall.
The sale in Okeechobee, Fla, saw top prices of $285 per hundredweight on 200 to 300 pound steers and bulls, with the entire weight range averaging over $250 per hundredweight.
“Few of us have gotten used to hearing calf prices in the $2 range, now do we need to prepare ourselves for $3 per pound?” Wall asks. “Stocker cattle demand does not appear to be cooling off and it looks like we’re headed for an early spring.”
Wall also noted that tight inventories of cattle “have hit home for boneless beef processors as culling season is now over and high dressing slaughter cows and bulls are bringing over $100 per hundredweight, well before the peak of grilling season.”
Last week’s auction receipts totaled 259,300, compared to 213,900 the previous week and 309,800 last year. Direct sales of stocker and feeder cattle totaled 54,500, with video/Internet sales at 65300. The weekly total was 320,300, compared to 386,400 a year ago.
Friday afternoon’s cattle on feed report was seen as slightly positive for markets. Total cattle on feed was estimated at 11.8 million, 2 percent above last year. Cattle placed in January were estimated at 1.85 million head, down 2 percent from the previous year, and January marketings totaled 1.82 million, up 2 percent.