Compared to last week, feeder and stocker cattle sold unevenly steady to 2.00 lower with several instances as much as 5.00 lower. The full decline was noted on both calves and yearlings in major auctions markets and Texas direct trading areas on weights over 800 lbs. A huge rainmaking front parked itself over most of the Plains and the Midwest for much of the week with beneficial rains from south Texas to northern Iowa. The persistently wet weather curbed receipts and dampened demand with up to 8 inches of rain measured in various spots throughout the storm.
The Southwest technically remains in drought status, but the eastern half of Texas has seen substantial moisture in recent months and now has the pond water and grass to support cattle once again. However, breeding stock and replacement quality heifers are in short supply and many of these timid producers are easing back into stockers, some of which are coming from Mexico with imports up over 20 percent from the same period a year ago.
On the other hand, west Texas and bordering areas remain largely dry, with the exception of a few light snows, and locals are bracing themselves for another barren year.
Friday’s USDA cattle-on-feed report had few surprises with March 1st inventories coming in very close to expectations at 102.6 percent of a year ago. Feedlot headcounts have consistently posted year over year increases for nearly two years now, leaving many participants to wonder if the number of smaller feeding facilities (that don’t report) ceasing operations hasn’t affected the data by shifting a larger percentage of the cattle to larger facilities. February marketings were slightly lower than thought at 98 percent of a year ago while February placements of feeders were well forecasted at 102.8 percent of the same period last year.
The mild winter and the record calf prices pulled many feeders to market earlier than normal (nationwide auction receipts are running 2.4 percent heavier than last year, but 3.4 percent lighter than the 5 year average) which explains why February placements remained relatively high even though total calf headcounts are lower. Most cattle marketers expect offerings to become extremely tight through the spring months with most light cattle turned-out and very few yearling feeder cattle left to sell. One of these months, the cattle-on-feed report will reflect just how short supplies really are – and this could bring a newfound spark to the industry after most of the bulls have left the room. For now, carcass weights are heavier due to outstanding feedlot performance during the mild winter and consumers are balking at the new retail beef prices as they start to grill once again.
Fed cattle regained a portion of this month’s losses this past week with prices ranging steady to 2.00 higher from 126.00-128.00 live and 202.00-204.00 dressed. This week’s reported feeder cattle auction volume included 50 percent over 600 lbs and 43 percent heifers.