USDA reports estimated cattle slaughter under federal inspection for the week ending Aug. 17 will be 651,000, or 9,000 head more than last week. Those numbers were reported a full week after a fire closed Tyson’s Holcomb, Kan., facility that harvests some 30,000 head per week.
The Tyson fire, and the uncertainties that came with it, was a devastating blow to cattle markets. On Monday Live Cattle and Feeder cattle futures locked limit down. On Friday, August live cattle closed down 27 1/2 cents at $99.925, while the October contract lost 47 1/2 cents to close at $98.05. Prices hit contract lows again Friday and closed at technically bearish weekly low closes.
For the week, October live cattle lost $8.70. November feeder cattle futures closed down 90 cents Friday and lost $5.525 for the week.
Cash fed cattle traded $5 to $6 lower for the week, with southern cattle at $105, and cattle in the north trading at $106 to $108, with dressed trade at $170 to $172.
The week’s biggest move, however, was the $20 rally in beef cutout prices. Choice cutout closed Friday at $238.69 per cwt., $22.32 higher, with Select at $213.26, or $19.45 higher for the week.
The combination of lower live cattle prices and higher boxed beef prices likely improved packer margins above $300 per head.
USDA’s Agricultural Marketing Service reporters called feeder cattle $5 to $10 per cwt. lower on the week at auctions. “Cattle buyers did have bids from feedyards, however most wanted to buy at lower prices early week as they did not know when the CME Cattle Complex slide would come to an end,” AMS said.
On Thursday, USDA Under Secretary Greg Ibach issued a statement saying USDA was “closely monitoring the effects” of the fire on cattle markets.
“USDA has been in contact with plant management and other stakeholders since the fire, and we understand production will shift to other plants to accommodate cattle that were committed to the Holcomb facility. USDA is prepared to provide additional staffing necessary to support grading and auditing services at the alternate locations,” Ibach said.
“USDA’s Packers and Stockyards Division (PSD) will continue to monitor cattle prices and procurement activities and will remain vigilant for any livestock marketing entities seeking to unfairly take advantage of the situation. If USDA detects any unfair practices, we will quickly investigate and take appropriate enforcement action,” Ibach said.
Producers or sellers can contact the PSD Western Regional Office at (303) 375-4240 at any time regarding payment or contract concerns.