Compared to last week, feeder cattle and calves weighing over 600 lbs sold steady to $2 lower as price levels for feeding-type cattle have started to level off following the wild run-up to start the year. Lightweight calves were not yet ready to give up the bull market and sold firm to $4 higher.
Auction receipts have been very heavy the past two weeks but should lighten at a fast enough pace to keep price levels from plunging off record highs. The Oklahoma National Stockyards had 15,000 head on Monday, while Joplin Regional Stockyards boasted over 14,000. Many other Midwestern salebarns were also testing the limits of their pen space, however most yearlings and large reputation calf strings are now gone and the number of pee-wee calves on offer was extremely large for this time of year. Also, a large percentage of feeder sales in the Southern Plains were off wheat which all spells that offerings will be slim pickens this spring.
The Burwell, NE Livestock Market had 444 head of top quality 5 weight steers last Friday that averaged 555 lbs at $224.50. On Thursday, Ogallala, NE sold two loads of fancy 702 lb steers at $190. Fed cattle markets made monstrous gains again this week with feedlots selling short showlists $5-$7 higher from $147-$150. The direct slaughter cattle market has actually gained $17-$20 since right before Christmas when prices were sitting near $130, a record-high at the time.
Northern dressed steer and heifer markets have gained $33 in that time to end this past week at $240. Finished cattle markets have obtained this remarkable feat with very little trading leverage by the feeding industry.
Total 2013 sales volume in the 5 Area cattle feeding region was only 24.1 percent by negotiated cash, while the balance was some sort of formula or contract method.
Texas feedlots haggled on just over 6 percent of their total sales, a figure that has fell by more than 40 percentage points in the last eight years. Sunflower state feeders sold 21 percent on a negotiated cash market last year while Nebraska traded 36.4 on the spot market and Iowa farmer-feeders drove the hardest bargain at 54.6 percent of total volume.
Boxed beef cut-out values established their new pinnacle on Wednesday afternoon with Choice boxes closing at $240.05 and packers reportedly still in the black.
Cattle feeders are finally making some good money on their closeouts which is imperative for backgrounders and cow/calf producers to continue being successful. When today’s finished cattle were purchased as feeders, it was estimated that it would take a record breaking market of $130 (plus) for them to breakeven. With feedcosts plunging since harvest many of this week’s closeouts are showing $250-$300 per head profits, not taking into account risk management expense. Friday’s cattle-on-feed report could be construed as slightly bearish with January 1st inventories 94.6 percent of the same time last year, while placements were 1 percent more than a year ago and marketings were 99.5 percent of 2013. This week’s reported auction volume included 52 percent over 600 lbs and 39 percent heifers.