Feeder markets shackled by feed costs, weak demand

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Heavy feeder cattle sold $2 to $5 per hundredweight lower last week with the full decline on weights over 800 pounds. Demand for grazing cattle has picked up in some areas, but stocker and calf markets were called uneven, depending on local demand and moisture conditions.

“Pressure continues on any class of cattle that requires grain,” says USDA Market News reporter Corbitt Wall. “Feed costs have eliminated the chance for most pens to breakeven, but the demand for grazing cattle is starting to spark in certain areas.”

The best feeder demand, Wall said, “this early spring is for the 6-weight stockers that need little or no warming-up for grass and will come off pasture as heavy feeders that can be topped off with new crop corn.”

Auction receipts nationwide were moderately heavy last week and larger than the previous week and last year. Year –to-date receipts, however, are still about 17 percent below 2012 and the 5-year average.

Drought worries and short feed supplies continue to worry many ranchers, and tough decisions are being made, Wall notes. “Like the one by the Olsen Ranch to sell 1,600 head of their one iron calves for the first time in three generations instead of grazing them until they are long yearlings and retaining ownership until finished.  These top quality thin-fleshed black calves were sold (March 9) at the Ericson, NE Livestock Auction. Five loads of 510-pound steers brought $199 per hundredweight, and another five loads of their bigger brothers averaging 605 pounds at $173.75 per hundredweight.”

Last week’s auction receipts totaled 267,300, compared to 221,900 the previous week and 236,000 last year. Direct sales of stocker and feeder cattle totaled 68,800 with video/Internet sales at 28,600. The weekly total was 364,700, compared to 334,200 last year.

Fed cattle traded $1 per hundredweight lower last week at $127. Dressed sales in Nebraska traded $2 to $3 per hundredweight lower at $201. The fed cattle trade has been locked into a trading range from $122 to $128 for the past six months, and breakevens have stretched above $130 for all of that time.

There is optimism going forward as late March and April will provide the tightest fed cattle supplies of the year. Cattle sellers are hoping warmer weather will drive beef demand and bolster packer needs.

Boxed beef prices were lower on the week. Choice boxed beef declined $1.52 on the week to close Friday at $195.26. Select boxed beef was down $1.00 for the week to close at $193.93. The Choice-Select spread was $1.83.

Slaughter cows and bulls sold steady to weaker on a live basis at auction. USDA’s Cutter cow carcass cut-out value Friday morning was $171.24 per hundredweight, up $2.12 from the previous Friday.



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