Cattle Market Notes Week Ending April 28, 2017

Cattle Quick Thoughts

Futures prices surged this week for both feeder and live cattle, especially near the end of the week. Feeder futures were up about $10 over last week for each contract. Live cattle contracts were up $6 to $9. This was an unexpected rally that was driven primarily by high demand for fed cattle to close out the month. This was a case of the futures market adjusting to the cash market. We are seeing an impressive demand-pull of cattle through the system which is supporting prices at each stage of production. This is in part shown by the decreasing carcass weights. Dressed steer carcass weights are down 30 pounds on average from the same week in 2016. 30 pounds per steer translates to about 9 million pounds of beef weekly. Put differently, it takes an extra 10,000 steers per week to produce the same amount of beef at these lower carcass weights. This pulls more cattle out of the feedlots and increases demand for feeder cattle to take their place. The story of 2017 will continue to be whether demand can outpace the larger supplies that will hit the market. While encouraging, this recent surge may be more of a short-term rally than an indication of continued long-term increases.

Cash Cattle:

Cash traded fed cattle were up $4.63 to an average of $136.25 for live sales. Dressed steers were up $7.59 to an average of $216.81. Fed cattle trade volume was 123,000 head through Thursday.

Feeder cash prices remained relatively steady this week. Mississippi feeder steers weighing 450-500 pounds were down 25 cents this week to average $155.50 while 750-800 pound steers were down $1.50 to $129. Average feeder prices in Oklahoma City for 500-550 pound steers were down $1.70 to $173.01 while OKC 750-800 pound steers were up $1.38 from last week to $141.74. It will be interesting to see if and how feeder prices next week react to the large increases in the futures market over the past few days.

[ … For more in depth Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Cattle futures rallied this week. April live cattle were up $8.15 to $138 while June live cattle were up $7.33 to $124.08. May feeder cattle were up $9.22 to $148.48 while May feeder futures were up $11.43 on the week to $153.58. Corn futures prices were down this week with May and July futures down 6 and 5 cents to $3.57 and $3.65, respectively.

Beef:                                                                                           

Wholesale boxed beef prices were higher this week. Choice boxes averaged $219.56, up $3.93 from a week ago. Select boxes ended the week at an average of $206.13, up $3.64 from last week. The choice-select spread was $13.43, up 29 cents from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.

Cattle Market Notes Week Ending April 21, 2017

Cattle Quick Thoughts

Feeder cattle prices showed gains this week in Mississippi and around the country. There was significant strength in the prices for heavier weight feeders. 700-800 pound steers in Mississippi were up $6 on average over last week – this trend occurred in other markets around the country, too. Feedlots, the ultimate destination for MS feeder calves, are moving cattle through the system at an impressive pace which is supporting feeder prices. Demand for fed cattle remains strong as marketings (the movement of cattle from feedlots to packers) have been very aggressive during 2017. The cattle on feed report released today adds further credence to this point. Marketings were 10 percent higher in March 2017 than in March 2016. Slaughter weights are lower. These signs point to feedlots being very current (i.e. there is not a large supply of market ready cattle waiting in feedlots). Placements were up sharply as well – 11 percent higher than last year and at a record high level for March. Good demand for cattle throughout the system has helped spur feeder prices over the past few weeks.

Cash Cattle:

Average cash prices continued to climb this week. Cash traded fed cattle were up $3.50 to an average of $131.62 for live sales. Dressed steers were up $3.88 to an average of $209.22. Fed cattle trade volume was 113,904 head.

Mississippi feeder steers weighing 450-500 pounds were up 75 cents this week to average $155.75 while 750-800 pound steers were up $6 at $130.50. Average feeder prices in Oklahoma City for 500-550 pound steers were up $4.56 to $174.71 while OKC 750-800 pound steers were up $3.11 from last week to $140.36.

[ … For more in depth Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Cattle futures prices also rose this week. The biggest gain was in the nearby live cattle contract. April live cattle were up $4.40 to $129.85 while June live cattle were up $2.05 to $116.75. April feeder cattle were up $1.08 to $138.78 while May feeder futures were up 97 cents on the week to $139.25. Corn futures prices were down this week with May and July futures each down 7 cents to $3.63 and $3.71, respectively.

Beef:                                                                                          

Wholesale boxed beef prices were also up this week. Choice boxes averaged $215.63, up $5.69 from a week ago. Select boxes ended the week at an average of $202.49, up $3.87 from last week. The choice-select spread was $13.14, up $1.82 from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.

EEM Alumni Spotlight: Jonathon Giuffria ’12

Let’s try something new with a Q&A from an EEM grad! Today we feature Jonathon Giuffria, one of our earlier Environmental Economics and Management (EEM) majors, class of 2012. Jonathon has been nice enough to answer a few questions about his experiences in our program and since graduating. (And yes, some of my questions are probably a bit leading…but I did ask Jonathon not to say stuff he didn’t mean! Really, I did.)

Jonathon, what have you done since graduating, up until your current job?

Prior to working with the EPA as an Economist, I traveled extensively overseas, worked with a MS entrepreneur solidifying supply chains, and attained my M.S. in Agricultural and Applied Economics from Virginia Tech.

Where do you currently work, what is your current job title, and what are your overall responsibilities?

I am an Economist with the EPA working in the Office of Pollution Prevention and Toxics. This office is charged with administering and implementing the Toxic Substances Control Act (TSCA), which was recently revamped by Congress in 2016. In general, I work with the Economics and Policy Analysis Branch to provide economic and regulatory support to the overall office. On a day-to-day basis, I help conduct preliminary market analysis reports attempting to discover how industry and the public would be affected by proposed environmental protections, such as chemical labeling or restrictions on consumer chemical uses. Learning the framework of the EPA and how to conduct cost-benefit analyses at MSU was paramount for my success here at EPA.

How has your background – in particular majoring in EEM – helped prepare you for this experience or other experiences you have had?

Many of the economic methodologies practiced within EPA were well covered by the Department. Additionally, the flexibility of the program allowed me to take several policy oriented classes which arguably landed me the job here. Had I not studied the statutes that promulgated the EPA’s creation in Environmental Law and Environmental Policy and had I not known known the fundamentals of a cost-benefit analysis, I firmly believe that I would not have stood a chance in getting a job here.

What did you most enjoy about the EEM program?

For one who likes to branch out of his or her immediate discipline, EEM is a great choice. I was ecstatic to have the flexibility to study Ecology and Forestry Economics one semester and then study Environmental Law and Natural Resource Conservation the next. The faculty were all willing to work with each student truly catering his or her course trajectory based upon his or her own unique interests, be it aspirations to practice law, work in the private sector, or advocate for wetland restoration with a non-profit. An important take-away is that my professors wanted me to have this experience – they were all very willing to work with me and carefully consider my educational aspirations.

What advice would you give for students trying to pick a major or for students thinking about the EEM major?

To the student who wants to take 12 hours a semester and show up to class still asleep, I suggest you pursue other options. However, if you are willing to learn and are passionate about environmental or agricultural issues – the next sustainable food system, fishery economics, how can we change the energy grid, or even moving to downtown DC and directly contributing to the environmental policy process – then I highly suggest that you speak with one of the faculty members in the Department of Agricultural Economics about the Environmental Economics and Management degree.

Any other thoughts on the EEM major, your experiences in the program, extracurriculars at MSU, etc. and how it has shaped your life, helped you achieve goals, etc?

As an EEM student, I was always encouraged by my adviser and professors to pursue my interests. Because of their flexibility and openness, I was able to study abroad in Spain, conduct research in Brazil, and even teach English as a Second Language in Arequipa, Peru. To top it all off, my major adviser* and I shared a common interest – we both studied Music as a secondary major. No matter how eclectic or quickly my interests changed, I was always supported by the Department. I firmly believe that my diversity in education and personal experience is one of the strongest assets that I bring to the workplace, and it all started with pursuing a degree in Environmental Economics and Management.

Any other comments?

College is expensive – better make sure your investment is worthwhile.

Thanks, Jonathon!

*Guess who?

Cattle Market Notes Week Ending April 14, 2017

Cattle Quick Thoughts

The big news in the cattle industry this week was the announcement that China will allow imports of U.S. beef for the first time since 2003. Practically the same announcement was made in September of 2016 and there remains no timetable for when trade could actually begin. Being able to export beef to China could be a lucrative opportunity for U.S. cattlemen. China is the most populated country in the world and has a growing middle class. The consumption of beef is also steadily growing amongst Chinese consumers, though still small when compared to U.S. consumption per person. Beef consumption per person in China in 2015 was about 8 pounds per person compared to 55 pounds per person in the U.S. The most important thing to take away from this announcement is that there is still much work to do before any U.S. beef enters directly into China. Negotiations on trade regulations must take place and will decide the specifics of the beef that China will accept. For example, China lifted the ban on Canadian beef in 2010. The fine print showed that they would accept only frozen boneless beef from cattle under 30 months of age that had not been given any beta agonists. Only in 2016 did this get expanded to add frozen bone-in beef, though the age and no beta agonist requirements still hold. The U.S. now must engage in similar trade negotiations with China. Even gaining access to a small segment of the Chinese market would be a big win for U.S. cattlemen.

Cash Cattle:

Average cash prices were higher for nearly all cattle this week. Cash traded fed cattle were up $6.41 to an average of $128.12 for live sales. Dressed steers were up $7.97 to an average of $205.34. Fed cattle trade volume was 95,568 head.

Mississippi feeder steers weighing 450-500 pounds were up $4.50 this week to average $155 while 750-800 pound steers were up $5 at $124.50. Average feeder prices in Oklahoma City for 500-550 pound steers were up $4.59 to $170.15 while OKC 750-800 pound steers were up $1.87 from last week to $137.25.

[ … For more in depth Livestock Prices and Production data and trends CLICK HERE… ]

Futures:

Cattle futures prices were up significantly this week. April live cattle were up $5.45 to $125.45 while June live cattle were up $2.93 to $114.70. April feeder cattle were up $4.05 to $137.70 while May feeder futures were up $4.47 on the week to $138.28. Corn futures prices were up this week with May and July futures up 11 and 10 cents to $3.70 and $3.77, respectively.

Beef:                                                                                          

Wholesale boxed beef prices were steady to slightly lower this week. Choice boxes averaged $209.94, down 4 cents from a week ago. Select boxes ended the week at an average of $198.62, down $1.38 from last week. The choice-select spread was $11.32, up $1.33 from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.

Cattle Market Notes Week Ending April 7, 2017

Cattle Quick Thoughts

The February meat exports report was released this week by USDA. Overall, the trend of strong export numbers continued. Total beef exports in February 2017 were 9 percent higher than February 2016. The value of U.S. beef exports totaled about $505 million, 16 percent higher than the same period last year. The U.S. Meat Export Federation estimated that the value of exports per head of fed cattle to be $278, up 16 percent from last year. Year to date 2017, beef exports are 13 percent higher in volume and 17 percent higher in volume than a year ago. February exports accounted for about 13 percent of total beef production, similar to a year ago.

Cash Cattle:

Cash traded fed cattle were down $6.17 to an average of $121.71 for live sales. Dressed steers were down $7.97 to an average of $197.37. Fed cattle trade volume was just over 17,000 head.

Mississippi feeder steers weighing 450-500 pounds were down $4 this week to average $150.50 while 750-800 pound steers were down $3 at $119.50. Average feeder prices in Oklahoma City for 500-550 pound steers were up $5.56 to $165.56 while OKC 750-800 pound steers were down $1.58 from last week to $135.38.

[ … For more in depth Livestock Prices and Production data and trends CLICK HERE… ]

Futures:

Cattle futures prices were mostly steady to slightly higher this week. April live cattle were up 8 cents to $120 while June live cattle were up 90 cents to $111.78. April feeder cattle were down 10 cents to $133.65 while May feeder futures were up $1.40 on the week to $132.80. Corn futures prices were down this week with May and July futures each down a nickel to $3.59 and $3.67, respectively.

Beef:                                                                                          

Wholesale boxed beef prices were lower this week. Choice boxes averaged $209.99, down $7.16 from a week ago. Select boxes ended the week at an average of $200, down $9.79 from last week. The choice-select spread was $9.99, up $2.63 from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.

Cattle Market Notes Week Ending March 31, 2017

Cattle Quick Thoughts

Mississippi cattle prices have shown steady improvements since mid-February. Average auction prices for lighter weight (500-550lb) and heavier (750-800lb) steers are each about $10/cwt higher than six weeks ago. Perhaps the most impressive 2017 MS price rally has been in cull cow prices. Boning utility cull cows ended the week at $67.50/cwt – up about $17 or 25% since the end of January. While cull cow prices are historically seasonal, the increase we’ve seen over the past two months is higher than normal. For comparison, the average seasonal rally for this time of year is about $8/cwt or 10% (see this comparison in a chart HERE). These seasonal rallies are usually not followed by immediate sharp declines as they are supported by stronger ground beef demand during the warmer months. Cull cow prices in Mississippi have historically held steady during April to August over the past five years. During these months, the five-year average low is only $3 below the average high. Cull prices generally deteriorate significantly after September each year.

Cash Cattle:

Cash traded fed cattle dropped slightly to an average of $127.88 for live sales, $1.07 lower than last week. Dressed steers were down $7.63 to an average of $205.34. Fed cattle trade volume was just under 53,000 head.

Mississippi auction prices were steady to slightly higher this week. Feeder steers weighing 450-500 pounds were a buck higher this week to $154.50 while 750-800 pound steers were unchanged at $122.50. Average feeder prices in Oklahoma City for 500-550 pound steers were down $5.74 to $160 while OKC 750-800 pound steers were up $3.85 over last week to $136.96.

[ … For more in depth Livestock Prices and Production data and trends CLICK HERE… ]

Futures:

Cattle futures prices decreased this week after six straight weeks of gains. April live cattle were down $2.15 to $119.93 while June live cattle were down $1.85 to $110.88. April feeder cattle were down $1.75 to $133.75 while May feeder futures dropped $1.47 on the week to $132.40. Corn futures prices were up this week with May and July futures each up 9 cents to $3.64 and $3.72, respectively.

Beef:                                                                                          

Wholesale boxed beef prices were lower this week, ending an impressive five-week rally. Choice boxes averaged $217.15, down $5.97 from a week ago. Select boxes ended the week at an average of $209.79, down $5.51 from last week. The choice-select spread was $7.36, down 46 cents from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.