Personal Remarks: I continue to struggle with how to digest the current cattle market environment. I know that at some point things will cool off and I wish I knew with certainty when that will come. I do know one thing, one day we all will look back at this period with great awe and say “WOW!” I am hopeful that those who are able, are taking advantage of the strength in prices to improve either farm balance sheets or farm infrastructure. I do believe (although, again, with cautious uncertainty) that this strength will continue into the next few months, thereby allowing the bulk of Mississippi’s producers who have cattle ready in the fall to capitalize on this as well. In the mean time, attempt to protect your marketing opportunities and prices when possible. If I can help with these decisions please do not hesitate to call or write (662.325.7986 or jmr26 “at” msstate.edu)
Negotiated cash trade moved sharply higher this week. The five-area weighted average steer price for the week ended Friday was $162.86, up $6.84 from the previous Friday, and dressed steers averaged $256.33, up $9.76. A few live sales in Texas panhandle were at $162, while at $165 in Kansas. In Nebraska, live and dressed sales were reported at $163.50-$166 and $257, respectively. Sales in the Western Cornbelt were $160-$163 and $257, respectively for live and dressed.
Feeder steers rallied again this week in Mississippi auctions, improving about $10 for yearlings 700+ pounds. Steer calves under 700 pounds were steady to $10 lower. Feeder heifers saw similar strength, up $10-$20 for 600+ weight cattle. Heifer calves were mostly even. Cull cows and bulls were $3 lower to $1 higher. Feeder steers and heifers in Oklahoma City’s auction were steady to $3 higher, while calves were called steady to $3 lower.
[ … For Livestock Prices and Production data and trends CLICK HERE … ]
The remainder of the losses of two weeks ago were largely recovered this week, especially for the remaining 2014 contracts. The market is still uncertain of what direction the 2015 contracts need to be in, but those contracts still ended the week in positive territory. Cash fed cattle and beef prices provided the bulk of the support. Macro-economic data continue to be positive and, therefore, provide support on the demand side. This week’s Cold Storage report, showing the quantity of meat in freezers, revealed shrinking supplies of all major meats (beef, pork, and chicken) — (click HERE for some commentary on the report). However, signs indicate that the broiler industry has been ramping up production which may add pressure. The Cattle on Feed report indicated that light weight placements of cattle into feedlots were higher, but this was more than offset by smaller heavy weight placements. More detail on this report can be found HERE.
Corn prices continue to be under pressure. The condition of the crop looks good, borderline great (76% of the crop is rated Good or Excellent). Many corn market analysts expect yields to be north of 170 bushels per acre, which would likely push total production above 14 billion bushels.
Wholesale boxed beef prices were higher. Choice boxes averaged $253.77, up $3.62. Select boxes ended the week at an average of $249.15, up $5.62. The strength was carried on the back of “low-value” cuts like round and chuck which improved on the week, while “high-value” cuts like ribeye and sirloin moved lower.
Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.