Compared to last week, yearling feeder cattle started the week 3.00-5.00 lower then turning mostly 5.00-10.00 lower as the week progressed. Calves traded mostly 5.00-15.00 lower with instances 20.00 lower throughout the Southeast. Calf prices have lost a third of their value in just a few short months, as any class of feeder calves do not look attractive to buy as the bottom continues to succumb in this market free-fall. Some of the best 500 lb steer calves are now looking at 2.00/lb or less in many areas.
Fear seems to be a very good motive that is driving this feeder cattle and fed cattle market as the cash market searches for a bottom. Last Friday’s limit higher move in the Live and Feeder cattle futures was nothing more than a mirage. Cash fed and feeder cattle prices along with the futures continue to slide into a black hole as the inability to draw any kind of interest into this market has uncertainty dominating the picture as huge losses continue in the cattle complex. The “calf run” is beginning to start and with wide price spreads for similar weight and class calves depending on if they are weaned and have a health program or if they are right-off the cow, severe discounts will more than likely be seen. Fed cattle dressed sales on Wednesday traded in Nebraska and the Western Cornbelt; 13.00 lower than last week at 187.00-190.00, with live sales 8.00 lower at 117.00-120.00. On Thursday a few live sales traded from 115.00-119.00 and few dressed sales at 184.00-186.00.
In Kansas on Wednesday light trade on live sales sold 4.00-8.00 lower at 124.00; then on Thursday, live sales traded at 118.00-120.00. Boxed-beef has continued its aggressive price slashing hoping to find a buyers’ market. With prices falling so fast retail buyers seem to be at ease to take a wait and see approach to see if prices will fall further. On Tuesday of this week the Cutter-Cow cutout value closed at 215.13 for 90 percent lean, but closed 5.82 higher than Choice cutout at 209.31. Then on Wednesday the Cutter Cow cutout plummeted 14.73 to close at 200.40 as choice boxed-beef fell .69 cents to close at 208.62.
With record heavy carcass weights and record highs for the number of cattle grading choice, Choice boxed-beef has lost over 55.00 from the May record high to current. Friday Choice boxed-beef closed 1.78 lower at 205.77, compared to last Friday’s close at 212.23. The National Restaurant Performance Index was released September 30th, as a result showed softer-same store sales and customer traffic levels. The August RPI stood at 101.5, down 1.2 percent from July, the lowest level in 11 months. Despite the decline, August represented the 30th consecutive month above 100. With foodservice a key driver in beef demand, going forward it will be important to keep these levels above 100. Corn Belt farmers are in the middle of harvest with 18 percent of the corn crop completed a bit behind the 5 year average at 23 percent with 68 percent still rated good to excellent. Soybean harvest is 21 percent harvested, compared to the 5 year average of 16 percent with 62 percent rated good to excellent. Auction volume included 47 percent over 600 lbs and 35 percent heifers.