The cattle market took a turn to the upside in October. After holding in the mid-$60/cwt. range through most the summer, prices moved into the $70 level as November began.
Feeder cattle and calves also improved somewhat in October but really shot up as the new month began. With yearlings almost impossible to find, the emphasis of the feeder market is on this year's crop.
Cattle and calves on feed for the U.S. slaughter market in feedlots with capacities of 1,000 head or more totaled 11 million head on Oct. 1. This is 7% above the Oct. 1, 1999 level and 13% higher than 1998. It includes 6% more steer and steer calves and 9% more heifer and heifer calves. Arizona and South Dakota recorded the largest percentage gains in numbers on feed.
Fed cattle marketings in September totaled 1.99 million head - 2% above September 1999 and 7% above 1998. Most states recorded either minor increases or lower marketings, but Arizona, Oklahoma and South Dakota had substantial percentage gains.
September placements of cattle and calves into feedlots totaled 2.69 million head - 3% below 1999 but 1% above 1998. South Dakota and Arizona had the greatest percentage gains in placements.
September placements of cattle and calves weighing less than 600 lbs. were 775,000; 600-699 lbs. were 612,000; 700-799 lbs. were 681,000; and 800 lbs. and greater were 618,000. Placements under 600 lbs. were the highest since October 1999. The 600- to 700-lb. group showed the largest gain since January 2000. The two heaviest weight groupings were the lowest in two months.
Other feedlot disappearance totaled 54,000 in September, 13% below last year and 11% below 1998. This figure includes death loss, movement from feedlots to pasture and shipments to other feedlots for further feeding.
USDA Outlook Report The latest USDA "Livestock, Dairy and Poultry Situation and Outlook" report contained these interesting facts:
- The latest cattle-on-feed statistics confirm that widespread drought has sharply reduced the number of heifers bred in 2000, as well as heifers expected to calve and enter the cow herd in 2001.
- If large numbers of heifers are retained and bred next year, it will sharply reduce slaughter levels in the second half of 2001.
- Although beef production remains on a record pace in 2000, so are retail prices for Choice beef. The Choice-Select spread on boxed beef has widened to more than $10/cwt.
- Many of these better grading cattle do not show up in the day-to-day price quotations.
- As the market shifts toward more branded and case-ready products, more cattle are priced under contracts. This shift is essential as the industry moves from a commodity market toward a market of higher and consistent quality beef for which consumers appear willing to pay top dollar. Contrast this with the inconsistent quality of the '90s "lean beef" market.
The fed cattle market will probably see some weakness as winter proceeds. Prices for Choice slaughter cattle are expected to remain slightly under 1999. Feeder cattle and calves will mirror the fed market. Light supplies of feeders, together with fairly strong feedlot demand, will help.
The holiday season, however, is an awkward period in which to sell feeder animals. Many livestock markets don't operate on holiday weeks, livestock market news reports (both government and private) become scarce, and slaughter plant closings are common due to religious reasons.
Above all, the demand for beef is strongly replaced by other traditional holiday foods.