An interesting trend is developing in a market where all the chatter of late has been the “wall of cattle” that everyone expects to hit the market later this spring. The industry standard for cash cattle sales is that the packer takes delivery of the cattle within seven days of the trade. Over the past several weeks, however, packers have bought a sizeable number of fed cattle on the cash market with a 15- to 30-day window to take delivery.
How will that play out in the fed cattle market? Time will tell.
Looking at trade volume, for the week ending March 24, the Five Area formula sales volume totaled 212,103 head, compared with about 205,220 the previous week. The Five Area total cash steer and heifer volume was 120,137 head, compared with about 104,711 head the previous week.
Of those cash sales, the majority are still sold on a 1- to 14-day delivery. But the past three weeks have seen more cash cattle trade with more days; about 47,600 head of 15- to 30-day delivery last week, along with over 45,000 head the 2 weeks prior. That’s a trend worth considering.
The estimated weekly total federally inspected cattle harvest was 607,000 head, compared with 613,000 head the same week last year. The current year-to-date total is running about 142,000 head higher than last year.
Nationally reported forward contract cattle harvest was about 42,000 head, compared with about 38,000 head the previous week. The packers have about 261,000 head of forward contracts for April along with very big 15- to 30-day cash sales for April.
Now looking at the prices, the Five Area weekly weighted average cash steer price was $125.90 per cwt, compared with $127.91 the previous week, $2.01 lower. The weighted average cash dressed steer price for the Five Area region was $201.79, compared with $205.47 the previous week, for a drop of $3.68 lower.
The Five Area weighted average formula price was $203.32 per cwt, compared with $202.53 the previous week, making it 79 cents higher.
We report the Five Area prices because the region encompasses the principal cattle feeding areas of the U.S. The Five Area region includes the major feeding areas from Texas (including Texas, Oklahoma and New Mexico), Kansas, Nebraska, Colorado and Iowa-Minnesota, an area that includes at least 80% of the total national fed cattle sales each week.
The latest average national steer carcass weight for week ending March 10 was 881 pounds, which was down 2 pounds from the previous week and level with the same week last year. The Choice-Select spread was $6.69 on Friday, compared with $8.73 the previous week and $6.07 last year.