National Feeder & Stocker Cattle Summary Week ending Nov. 4th
Wednesday, November 09, 2016 6:00 AM
Compared to last week, steers and heifers traded steady to 4.00 higher, with instances up to 8.00 higher. Two weeks of higher trending markets is just what the doctor ordered for an ailing market that had seen a tremendous amount of equity erode in the past two months. Cow/calf producers were disheartened with what was happening in the auctions and were content to make those spring born calves bigger before letting someone else own them. The market downturn was not much of their making, but as a cow/calf producer, it is very hard to make incremental changes to an operation when the generation interval on cattle is much longer than poultry and hogs. Typically, this time in the year some of the earlier weaned calves to be getting that magical “45+ day weaned” or “LTW” tag put on the early consignment sheet for the sale barn. The discount between an weaned/unweaned is still in the marketplace, however more of the weaned consignments are now showing up. What goes down, must come up at some point in time and in the last couple weeks, the feeder market has recovered some of those previous losses. The markets have not rebounded to the price levels at the beginning of September yet, however they are much closer than just two short weeks ago. On Wednesday, yearlings are still in demand; at Bassett, Neb. a load of 940 lb steers sold at 136.00. A premium is still being paid for those yearlings that finish prior to early summer/late spring 2017. Fed cattle trade had moderate movement this week at mostly 105.00, steady with last week in the Southern Plains and dressed sales 1.00 lower at 163.00 in the Northern Plains. Year to Date cattle slaughter is 5.0 percent larger than 2015 or over 1.2 million head. Producers have started culling cows this year and are removing 10,000 head of cows and bulls more per week than fall 2015. Coupled with much larger fed cattle harvest due to packer margins being extremely lucrative, 9 of the last 11 weeks of beef production have been reported over 500 mil pounds (this period includes Labor Day week). For the same corresponding time period in 2015, there was not a single week that the beef production was over 492 mil pounds. The hog complex continues at a torrid pace by harvesting an estimated 2,532,000 this week (an all-time record high) due to exceptional profits and as an asterisk to that large number posted, analysts reported this past Sunday a couple of plants decided to pay the overtime just to try and get through the glut of hogs in the Midwest. This week an estimated 1,046.0 mil pounds of weekly red meat production would also be the highest weekly total on record for that category. As reported a couple of weeks ago, total red meat supplies in cold storage were a record high for the month of September, since the data was first recorded in 1946. Coupled with the largest cattle and hog harvests in many years in the month of October, cold storage stocks should be expected to increase on the next report as consumers still want meat prices to come down more. The meat retailers’ margins have been higher recently after this past years historically high prices and with lower wholesale prices, they are trying to recoup margin lost in the last year. Auction volume this week included 38 percent over 600 lbs and 37 percent heifers.
Source: USDA-Mo. Dept. of Ag Market News Service, St. Joseph, Mo