Cattle Outlook: Drought moves calves to feed yards early

The severe drought in the southern plains is pushing a lot of cows to slaughter and calves into feed yards. Over the last five weeks beef cow slaughter is up over 20% compared to a year ago. Year-to-date, both beef cow and daily cow slaughter is up compared to the same period in 2010. USDA’s August cattle on feed report said the number of cattle placed on feed during July was up 22.5% from a year ago and the largest for any July since this data series began in 1996. Placements of calves weighing less than 600 pounds were up over 50%. Total on feed number on August 1 was up 7.6% from a year ago and the highest for that date since 2006.

Last month, the average price of choice beef at retail was $4.781 per pound. That is 2.8 cents lower than in June and 9.1 cents lower than in May. Normally July has the lowest retail beef prices of the summer. July grocery store prices for beef were 33.7 cents higher than in July 2010. Our demand calculations indicate domestic demand for beef is slightly above year-ago.

The amount of beef in cold storage at the end of July was up 7.5% compared to the year before. Frozen stocks of pork, chicken and turkey were also up.

USDA says that the 5 market average live price for slaughter steers in July was $111/cwt, up $2.80 from June and $13 higher than July 2010.

Boxed beef prices were lower this week. Friday morning the choice boxed beef carcass cutout value was $186.62/cwt, down 24 cents from last week. The select carcass cutout was down $3.42 from the previous Friday to $180.42 per hundred pounds of carcass weight.

The 5-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $112.95/cwt, down $1.09 from last week. Steers sold on a dressed weight basis this week averaged $180.12/cwt, $3.09 lower than the week before.

This week’s cattle slaughter totaled 669,000 head, up 1.8% from the week before but down 2% compared to the same week last year. The average steer dressed weight for the week ending August 13 was 846 pounds, unchanged from the week before, 6 pounds heavier than for the same week in 2010, and above year-earlier for the 36th consecutive week.

Cash bids for feeder cattle around the country this week ranged from $7 lower to $3 higher than the week before. Oklahoma City auction prices this week were $2 to $6 lower with price ranges for medium and large frame #1 steers: 400-450# $148-$157.50, 450-500# $142.50-$151.50, 500-550# $138-$150, 550-600# $130-$146, 600-650# $127-$141, 650-700# $129.50-$139.75, 700-750# $132.75-$138, 750-800# $128-$133, 800-900# $126-$130 and 900-1000# one group of 39 head at $120/cwt.

The August fed cattle futures contract ended the week at $114.30/cwt, the same as last week’s close. October lost 30 cents to end the week at $115.20/cwt. December live cattle settled at $117.10/cwt, down 22 cents from the previous Friday.

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