Central Plains need water – feeder cattle and calves trend lower

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The historic drought of 2012 continues for America’s Heartland. Now entering its sixth month ranchers are now finding softer demand for the limited supplies of feeder cattle and calves. Many regions are seeing dry conditions that equal or exceed the Kansas City area, but the yearly totals for that city help put the drought in perspective. Through Halloween, Kansas City normally receives nearly 36 inches of rainfall. This year the total is nearly 16 inches short of that at just more than 19 inches. And most of that fell before July 4th.

Hurricane Isaac brought nearly 6 inches of Kansas City’s rainfall this year, but that event was two months ago. Since then the region has received less than two inches. The result was optimism for fall pastures, but reality has produced forage that is way short of hope and expectations.

Declining pasture and range conditions since Hurricane Isaac have begun to tamp down bids on feeder cattle and calves. At auction last week, a light supply of yearling and a heavier offering of calves weighing over 650 pounds sold steady to $2 lower. Steer and heifer calves throughout the Plains and Midwest sold unevenly steady. The bright spot was Southeastern calf markets that were steady to $4 higher.

“Most buyers have shown good demand and general desire to take lightweights through the winter,” said USDA Market News reporter Corbitt Wall, “but feed/water shortages along with health challenges have kept the market in check.  Most cattlemen agree that ownership of yearling feeders or middle-weight grazing cattle will be prime property come springtime, but cattle growers don’t want to bite off more than they can chew following two century-caliber droughts in our nation’s primary livestock production regions.”

Wall says the “once bright wheat pasture outlook is badly in need of a rain across the Southern Plains and farther north precious pond water is at its lowest point in memory.  Backgrounders don’t want to find themselves in the precarious position of hauling hay and water all winter long, like many cow/calf producers will be as they struggle to hold on to their core herd.”

Last week’s auction receipts totaled 265,200, compared to 302,700 the previous week and 338,400 last year. Direct sales of stocker and feeder cattle totaled 35,800 with video/Internet sales at 6,600. The weekly total was 307,600, compared to 397,000 last year.

Cash fed cattle markets traded steady to $1 lower last week. Cattle sold out of feedyards in most regions at $126 to $127 per hundredweight, while cattle sold on a dressed basis steady to $2 lower at $195 to $197per hundredweight. Supplies of market-ready cattle remain tight, and early ideas for this week’s trade put the market steady again.

Hurricane Sandy helped put a damper on beef sales in the Northeast, and boxed beef prices saw the week’s largest volatility, with the market moving sharply lower for the week. Choice boxed beef traded Friday at $192.74, a decline of $4.08 per hundredweight from the previous Friday. Select boxed beef declined $4.15 for the week to $175.54. The Choice-Select spread finished the week at $17.20 per hundredweight, an increase of 3 cents from the previous week.

Slaughter cows and bulls sold steady with the exception of Oklahoma cows $2 to $4 lower. USDA's Cutter cow carcass cut-out value Friday morning was $159.77, down 54 cents from the previous Friday. Omaha cash corn was 6 cents per bushel lower for the week at $7.82 per bushel.

 


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c. andrews    
chicago-kansas  |  November, 05, 2012 at 10:56 AM

The last comment intrigues me to no end. In the past if a disruption such as Sandy would cause the front option of futures to take a dive. Remembering back to the 1974 time line there was a period involving truck strikes. Floor trades had personel calling major truck stops to find if truck were stalled or moving. During a single day the price would hit both limits. I am amazed the lead option nor the cutout has moved because of the--the greatest disruption in a hundred or more years. I'm doing a long study regarding the history of the cattle business causing me to realize any other time we had reached peak prices was because of retention--heifer retention from 1958-74 taking prices from the $20's to $55 and then back to $32 when the numbers caughet up. This time we are looking at depleating numbers and for probably another 2 years.


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