Cash fed cattle prices took it on the chin this week, starting out lower and then growing softer as the week progressed.
Live sales were $3 lower in the Southern Plains at $100 per cwt, $4-$6 lower in Nebraska at mostly $100 and $2-$5 lower in the western Corn Belt at $102-$107. Dressed sales were $9-$10 lower in Nebraska at $160-$166; $7-$9 lower in the western Corn Belt at $163-$166.
Through Thursday, the average Five Area direct price for steers was $4.31 less at $102.31 on a live basis; $5.43 less in the beef at $166.19.
Week to week on Friday, Live Cattle futures closed an average of $3.53 lower through the front three contracts and then an average of 46 cents lower.
There were plenty of potential contributors to the free-fall, from increasing supply and continued logistic challenges left by the Tyson fire to the potential demand impact from Hurricane Dorian to piling on by electronic traders, as well as lower wholesale beef values.
Choice boxed beef cutout value was $4.46 lower week to week on Friday at $227.31 per cwt. Select was $10.33 lower at $201.94. Compared to the Friday of the Tyson fire, that’s still $10.94 higher for Choice and $8.13 higher for Select.
“Unfortunately, there is likely more downside in the finished cattle market as late September and October are always tough months for cattle feeders,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The only thing a cattle feeder can do at this point is ride the tough times out. Any other plans will likely lead to even greater losses. The market will improve over the next four to six months and profits should be favorable.”
Calf and feeder prices tread water
The generally gloomy outlook weighed on cash calf and feeder cattle prices in most areas.
Nationwide, steers and heifers sold from $3 per cwt lower to $2 higher, according to the Agricultural Marketing Service (AMS). Analysts say the North Central region was on the positive side of neutral, while weakness was widespread at auctions in the Southern Plains and Southeast.
Weaker corn prices and oversold conditions helped Feeder Cattle futures gain about $2 at the front of the week, but they lost much of it by the end of Friday’s session, pressured by cash fed cattle prices.
Week to week on Friday, except for 2 cents lower in Jan, Feeder Cattle futures closed an average of 58 cents higher across a broad range (5 cents to $1.05 higher).
Even for a holiday week, the 179,600 auction, direct and video receipts seemed light.
So far, positive forage conditions across much of the country are allowing producers to extend their marketing decisions.
Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, September 7, 2019.