Last week brought solid improvements in fed-cattle prices, with support from gains in wholesale-beef prices and commodity markets in general. USDA reports slaughter-cattle prices averaging $84.59 for the week, and packer bids were on the upswing as the week went on. The Texas Cattle Feeders Association reports cash trade developing at $86 Thursday in the southern feeding region, and packers returned to the market Friday with similar bids. TCFA notes the current upswing in cash prices follows a long trend toward lower prices that began all the way back in April, 2008, when prices peaked at almost $102 per hundredweight.
After weeks of fluctuating in the low-$130 range, boxed beef made significant gains, averaging $137.68 per hundredweight for the week, and Friday’s price topping out just above $139.
Slaughter numbers last week, at 646,000 head, were slightly below a year ago, but with dressed weights averaging almost 2 percent heavier, beef production was up 1.9 percent, according to USDA.
Packer margins remain tight, which could limit further gains in cattle prices. Last week’s Sterling Beef Profit Tracker showed packer margins improving by about $15 per head during the week ending Oct. 17, but they still were loosing almost $53 per head. Feeding margins also improved that week by about $20 per head, but remained in the red by over $80. More manageable breakevens and fed-cattle prices at the $86 level should improve the margins on cattle coming out of feedyards in the short term.
Unfortunately, corn prices also have posted gains as wet weather delays the harvest.