Cattle Quick Thoughts
The drought conditions in the Northern Plains continue to worsen and are impacting the cattle herds in the region. The latest USDA drought monitor (available here) shows that approximately half of the counties in North Dakota are under an extreme drought (D3 intensity). Most of South Dakota and eastern Montana are also in drought conditions. The drought-induced shortage of forage has led to the sale of many replacement heifers and pairs that would have otherwise been retained. Emergency grazing of CRP land is helping some producers as well as relatively low grain prices in the area. This is important to producers across the U.S. because approximately 11 percent of the cattle in the U.S. are currently in drought conditions – mostly in the Northern Plains area. Cattle that cannot be supported in drought areas are either being sold and moved to other areas or they are entering the slaughter market. Either instance leads to lower cattle numbers in these areas.
Cash traded fed cattle prices showed some strength this week. Live cattle were up $1.96 to an average of $119.48 while dressed steers were up $2.21 to an average of $190.08.
Mississippi feeder steers weighing 450-500 pounds averaged $152.50 while 750-800 pound steers averaged $129. Average feeder prices this week in Oklahoma City were $150.22 for 750-800 pound steers. There were no prices reported during the previous week due to the holiday.
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Cattle futures prices showed significant gains this week. August live cattle were up $2.80 to $118.05 while October live cattle were up $4.68 to $118.83. August feeder cattle were up $9.30 to $154.80 while September feeder futures were up $9.15 on the week to $154.65. Corn futures prices were lower this week with July and September down 12 and 14 cents to $3.69 and $3.77, respectively.
Boxed beef values were lower this week. Choice boxes averaged $212.93, down $8.16 from a week ago. Select boxes averaged $198.92, down $5.84 from last week. The choice-select spread shrunk to $14.01, down $2.32 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.