Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The Market Update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA NASS and AMS reports.
Cattle
Fed cattle prices hit record highs last week. Many are contemplating whether fed cattle can reach $270/cwt. Just two weeks ago we were wondering if the highs had been put in. If prices do move higher, it will happen sometime in the next six weeks since the demand for beef will be at its peak. There are reports that some packers are buying cattle for mid-June indicating they do not believe prices will go down before then. Prices are not the only news garnering attention. Although no details have been given, China has reportedly agreed to purchase an additional $17 billion of ag products each of the next three years. China has renewed the certifications for many of the beef companies and exporters, opening the door for possible purchases of U.S. beef. Sales to China will likely be limited due to current price levels, however.
The Chicago Mercantile Exchange announced last week that it would be expanding the trading limits for both live cattle and feeder cattle contracts and industry reaction has been mixed. Expectations for Friday’s Cattle on Feed report are that the inventory will be higher than this time last year. If realized, it would be the first time feedlot inventories have been higher in 18 months. Pre-report estimates for placements range widely with some analysts expecting an 8% increase compared to last April. It is estimated 535,000 head were harvested last week, 8,000 more than the week prior and 321,000 fewer than last year.
Top Quality
Fed cattle were sharply higher again this week. Top quality beef steers and heifers brought $240-$263/cwt with several selling higher. Mixed Choice and Select steers and heifers ranged from $230-240/cwt. High grading Holstein steers were higher at $212-$244/cwt. Lower grading steers brought $182-$212/cwt. silage fed, and under finished steers brought $95-$181/cwt. Dairy Beef cross steers were steady to strong at $210-$250 with several lots selling higher. Cows were higher from $118-$169/cwt with some still selling into the 170s. Lower yielding cows brought $70-$118/cwt. Doubtful health and thin cows were brought up to $70/cwt. Dairy breed bull calves were mixed, selling from $800- $1,750/head with some higher. Dairy breed heifer calves brought $200-$800/head. Beef and Beef Cross calves were mostly steady $800 to $1,900/head. Light and lower quality calves sold up to $60.
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