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Cash prices for fed cattle were steady to $1 lower on slightly lower cash sales volume while formula prices were higher.
The cash market for fed cattle continues to roll on, looking to finish out the year with a little wind beneath its wings. NCBA released its long-awaited report on how it intends to address price discovery in the fed cattle market, with an anticipated start date of Jan. 1, 2021.
The speculation now is how much ramping up we will see in the cash market as packers and feeders prepare for that start date. The plan is voluntary, but the hammer of a possible regulatory or legislative is certainly in the toolbox and ready to swing if targets aren’t met.
This is a major development in the dynamics of the fed cattle market, so stay tuned and watch closely.
The Five Area formula sales volume totaled 249,355 head for the week ending Oct. 17, compared with about 229,000 the previous week. The Five Area total cash steer and heifer volume was 92,490 head, compared with about 96,000 head the previous week.
Nationally reported forward contract cattle harvest was about 37,000 head for the week. The nationally reported 15- to 30-day delivery purchases were 37,683 head for the week along with 30,779 head the previous week, so big numbers of forward-bought cattle will continue for many weeks.
Now looking at prices, the Five Area weekly weighted average cash steer price for the week ending Oct. 17 was $107.52 per cwt, which was 74 cents lower compared with the previous week. The same week last year it was $109.73, which was about 50 cents higher than the prior week.
The current Five Area weighted average live formula price was $110.72 per cwt for the week, which was about $2 higher with over 76,000 head. So this volume the last few weeks has jumped well over twice than where it was for a long time, indicating more feedlots are selling live formula now.
The weighted average cash dressed steer price was $168.35 per cwt, which was $1.32 lower than the previous week. The Five Area weighted average formula price was $173.29, which was $3.05 higher.
The estimated weekly total federally inspected cattle harvest was reported at 654,000 head, which compares with 643,000 head the same week last year.
The latest average national steer carcass weight for the week ending Oct. 3 was 924 pounds, which was the same as the previous week and still much higher than the 899 pounds the same week last year. That weight was 1 pound higher compared to the previous week last year.
The Choice-Select spread ended the week at $16.51 on Friday, Oct. 16, compared with $14.24 the previous week and a $25.00 spread last year.
Ed Czerwien is a market analyst in Amarillo, Texas. From the heart of Cattle Feeding Country, Ed follows the cattle and wholesale markets to keep beef producers up-to-date on the market moves that affect them. He previously worked with USDA as a Market News reporter. Ed is now semi-retired and continues to work with cattle trade analysis.
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