FED CATTLE: Fed cattle traded steady compared to last week. Prices on a live basis were mainly $110 to $111 while prices on a dressed basis were mainly $174 to $175.
The 5-area weighted average prices thru Thursday were $110.56 live, up $0.19 from last week and $174.82 dressed, up $0.80 from a week ago. A year ago prices were $108.74 live and $170.00 dressed.
The weekly 5-area weighted average price the previous three weeks has traded in a range from $110.62 to $110.67. Once end of the week trades are completed, it does not appear this week’s price will be much different than the prior three weeks and it will only be $1 higher than the same week one year ago.
Thus the past month of finished cattle trade mirrors the steadiness of the market since the middle of May. Since the middle of May the live cattle market has ranged from $107 to nearly $115 with an average near $110.50.
One would have to go back to the summer of 2013 to find a narrower cash trading range over as long of a time period as the market since May. This could be a good indication of reduced volatility in the market and a steady state.
BEEF CUTOUT: At midday Friday, the Choice cutout was $203.67 down $0.19 from Thursday and down $0.71 from last Friday. The Select cutout was $191.97 down $0.01 from Thursday and down $1.62 from last Friday. The Choice Select spread was $11.70 compared to $10.79 a week ago.
Wholesale beef prices seasonally come under pressure in late September and October as consumers move away from summer routines. How prices move is dependent on supply and demand. Demand for beef has been strong domestically and internationally.
Similarly, supply of beef and other meats has been increasing the past few years, and it is expected to continue increasing. Based on USDA numbers and calculations, per capita U.S. red meat and poultry consumption totaled 215 pounds per person in 2017 which was 15 pounds higher than 2014 and the highest level since 2007.
Projections are for per capita red meat and poultry consumption to be close to 220 pounds in 2019 and 2020 which is a very similar total compared to 2002 through 2007.
What is not similar is the breakdown between beef, pork, and chicken. In 2007, per capital beef, pork, and chicken consumption totaled 65, 51, and 86 pounds respectively. Expectations moving into 2019 are beef at 58 pounds, pork at 52 pounds, and chicken at 95 pounds. These values account for production plus imports minus exports.
OUTLOOK: October in the Southeastern United States has arrived and the weather conditions this week and next appear to be the second coming of August as temperatures are forecast in the 90s and the humidity is expected to remain high. Despite high temperatures, cattle producers across Tennessee welcomed October by setting wheels under several calves and cull cows this week with several auction markets running in high gear. The drier conditions provided producers the opportunity to get the trailer in the field while fairly strong market prices for calves and feeder cattle encouraged producers to take advantage of the situation.
Compared to last week’s Tennessee weekly auction average, steer prices this week were steady to $4 lower while heifer prices were $1 to $2 higher. The 500 to 600 pound steer price averaged $150 per hundredweight this week which is $8 higher than the same week one year ago but $18 lower than the five year average. One aspect of this market to consider is that 500 to 600 pound steer calf prices have been hovering in the low $150s since the middle of May.
It would appear they have a clear direction and that direction is steady, but prices will be pressured as more calves are brought to town. Similar to lighter weight steers, 700 to 800 pounds steer prices traded at $139 per hundredweight this week which is $5 higher than the same week last year. At this time, it does not appear that feeder cattle prices are going to come under pressure in the near term.
Contrary to the current feeder cattle market, the slaughter cow and bull market are seasonally faltering. The average slaughter cow price in Tennessee this week was $1 to $4 lower compared to last week while slaughter bull prices were $2 to $3 lower. These prices will only get softer as more cows and bulls move to slaughter. It may be wise to market them sooner rather than later if one plans to market them prior to the end of the year.
ASK ANDREW, TN THINK TANK: Instead of answering a question in this section this week, a question will be asked. The Tennessee Market Highlights publication is published 51 weeks out of the year and has been a mainstay for many years. Dr. Aaron Smith and I have been challenged by our department head to examine changes that can be made to the publication to reduce the work hours that go into this effort. Such changes may include removing certain portions of the publication, adding website links to material that is in the publication so we are not just reporting information that is elsewhere, and so on. With that in mind, I would like to get feedback from the readers to see what items we provide are necessary and what we can stop publishing. The purpose of this publication is to help producers and industry professionals stay on top of commodity markets, and we want to exceed expectations. Please shoot me an email with suggestions.
Please send questions and comments to firstname.lastname@example.org or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996.
FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –October $113.80 +0.18; December $118.15 -0.23; February $122.53 -0.05 Feeder cattle –October $157.78 +0.80; November $158.23 +0.48; January $154.38 -0.13; March $153.45 +0.08; December corn closed at $3.68 up $0.01 from Thursday.