The U.S. and Brazil have reached agreement to expand bilateral beef trade. On Monday, USDA announced that Brazil will allow imports of beef from the U.S. for the first time since the 2003 BSE case. The U.S. has agreed to open our market to fresh and chilled beef from Brazil. Brazilian beef will be sharing a 64,805 ton tariff-rate quota with several other countries. This shared quota equals only 15.5% of the Australian beef quota. Details of implementation should mean that significant beef movement will be a while in developing.
The U.S. economy added 255,000 jobs during July. That was 75,000 above trade expectations. Average wages increased by 8 cents per hour. More people with money is good for meat demand.
This week fed cattle prices were higher in heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $118.94/cwt, up 94 cents from last week's average, but down $29.54 from a year ago. The 5-area dressed steer price averaged $187.92/cwt, up $3.83 from the week before and down $45.83 from a year ago.
After three weeks of decline, beef cutout was higher this week. This morning, the choice boxed beef cutout value was $198.95/cwt, up $1.04 from the previous Friday. The select carcass cutout this morning was $190.45/cwt, up $1.59 from last week.
This week's cattle slaughter totaled 579,000 head, down 0.3% from last week, but up 8.4% from a year ago. Year-to-date, cattle slaughter is up 3.8% and beef production is up 4.4%.
The average steer dressed weight for the week ending on July 23 was 880 pounds, unchanged from the week before, down 4 pounds from a year ago, and below the year-ago level for the 12th consecutive week.
Feeder cattle prices and stocker calf prices at Oklahoma City were generally $4 to $6 higher this week. Prices for medium and large frame #1 steers by weight group were: 400-450# $181-$184, 450-500# $161-$175.50, 500-550# $143.50-$160, 550-600# $142-$162, 600-650# $139.50-$164.50, 650-700# $137.25-$154.50, 700-750# $142-$154, 750-800# $138-$146, 800-900# $134-$149 and 900-1000# $134-$139.75/cwt.
USDA weekly crop progress report said that 17% of U.S. pastures were in poor or very poor condition as of July 31. That is up 2 points from the week before and 5 points higher than a year ago.
The August live cattle futures contract settled at $117.67/cwt today, up $4.60 for the week. October fed cattle settled at $115.52/cwt, up $3.80 from the previous Friday. December fed cattle futures settled at $115.67/cwt.
August feeder cattle futures ended the week at $149.65/cwt, up $9.60 from a week earlier. September feeder cattle gained $8.63 this week to settle at $147.20/cwt. October feeder cattle closed the week up $6.15 at $143.87/cwt.