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Fed Cattle Recap

Fed Cattle Recap | Prices continue higher

Cash prices for fed cattle improved again and were steady to $10 higher on smaller cash sales volume.

In the roller-coaster world of the cattle feeder, the week ending May 23 was the second bright spot in a row as packers continued to pay up for fed cattle. However, even though fed cattle plants are reportedly running at about 80% capacity, the number of cattle ready for harvest but backlogged in feedyards is astounding—1 million by some estimates and it’s continuing to grow.

That’s a level of uncurrentness that cattle feeders have never experienced and it will take time, a lot of time, for packers to hew through the forest of heavy cattle. Carcass weights will get heavier, but in the end, consumers will benefit by higher quality beef and restocked grocery store meat cases. And as more and more states relax their lockdowns, more and more restaurants will reopen, adding additional outlets for beef.

The big question hanging over the market now is how the flow of cattle harvest will go in the second half of the year. For the second month in a row, the Cattle on Feed report showed smaller placements. Those feeders are still out there and when they come on feed, how heavy in terms of both numbers and in-weights, will placements be later on? Watch closely.

Looking at volume, the Five Area formula sales volume totaled 126,917 head for the week ending May 23, compared with about 134,000 the previous week. The Five Area total cash steer and heifer volume was 66,185 head, compared with about 85,000 head the previous week. 

Nationally reported forward contract cattle harvest was about 39,000 head this week. 

Now looking at prices, the Five Area weekly weighted average cash steer price was $117.06 per cwt, which was $4.75 higher compared with the previous week.  Last year the same week it was $115.78, which was about 1 lower than the week prior. This is the first time since the end of January that this year’s price has exceed last year. The current Five Area weighted average live formula price was $119.89 this week.

The weighted average cash dressed steer price was $183.35 per cwt, which was $3.70 higher than the week prior. The Five Area weighted average formula price was $178.17, which was $11.96 higher

The estimated weekly total federally inspected cattle harvest for the week ending May 23 was 555,000, head which compares with 647,000 head the same week last year, so quite a few weeks where this year’s weekly slaughter was well below each week last year. However, as beef plants have recovered from their COVID-generated cutbacks and closures, weekly harvest has been increasing each week, so we’re starting to close the gap.

The latest average national steer carcass weight for the week ending May 9 was 896 pounds, 3 pounds higher than the previous week and compared with 852 pounds the same week last year. Last year’s weight was steady with the week prior.  

The Choice-Select spread was $22.56 on Friday, May 22, compared with $15.26 the previous week and a $13.17 spread last year. 

 

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