The strong fall rally in cash prices for fed cattle has been stronger and longer than usual. While fed cattle prices tend to increase seasonally from late summer lows to the end of the year, it's also not uncommon for prices to weaken between Thanksgiving and Christmas and again in February before the spring rally, According to David Anderson, livestock economist at Texas A&M University.
Over the 5-year period from 2013-2017, the average rally has been about $11 per cwt, or 8.8%, from the last summer low to the end of the year. The Fall rally in 2018 totaled $15 per cwt or a 14% increase. The ongoing rally that began in the Fall of 2019 increased just over $22 per cwt or a 22.6% increase, Anderson writes in the weekly newsletter from the Livestock Marketing Information Center (LMIC).
Looking first at volume, the Five Area formula sales volume totaled 229,648 head for the week ending Jan. 4, compared with about 186,000 the previous week. The Five Area total cash steer and heifer volume was 71,031 head, compared with about 48,000 head the previous week.
Nationally reported forward contract cattle harvest was about 28,000 head for the week. The packers have 195,000 head lined up for January. National cash sales for the week included 22,126 head of 15- to 30-day delivery and 14,000 head from the previous week.
Now looking at prices, the Five Area weekly weighted average cash steer price for the week ending Jan. 4 was $124.21 per cwt, which was $1.93 higher than the week prior. The same week last year, it was $122.55, which was steady.
The weighted average cash dressed steer price was $198.60 per cwt, which was $3.38 higher.
The Five Area weighted average formula price was $194.39 per cwt, which was $1.96 higher.
The estimated weekly total federally inspected cattle harvest was 546,000 head, which compares with 535,000 head the same week last year and still another holiday week
The latest average national steer carcass weight for the week ending Dec. 21, 2019, was 904 pounds, steady with the previous week. That compares with 891 pounds the same week last year, which saw weights drop 1 pound from the week prior.
The Choice-Select spread was $3.10 on Friday, Jan. 3, compared with $4.39 the previous week and a $6.85 spread last year.