Despite low sales volumes, cash cattle prices are pushing higher this week. Most feedyards resisted bids of steady money, with cattle in the north trading at $109 - $110 live and $171 dressed, $1 to $2 higher than the previous week. Sales have yet to occur in the south.
Cash cattle have rallied nearly $10 from the recent lows, and futures prices have gained nearly $15. More seasonal price recovery is expected in the coming weeks. Feedyards in the north are set to deal with the season’s first significant weather event.
Analysts note that the industry has – so far – successfully navigated the loss of packing capacity due to the August Tyson fire, with feedyards remaining in a current position. While fed cattle supplies remain historically large, they are set to decline moving forward. Seasonal supplies will be at their peak in the first quarter of 2020.
Feeder steers and heifers sold uneven at auction this week from $3 lower to $2 higher. Some instances of steer and heifer calves selling in the Northern Plains at $8 lower. AMS reporters said, “Good demand remains for yearlings as the supply becomes more limited and the cash fed cattle market has come off lows received in the aftermath of the plant fire in August. Demand for calves has been light to moderate at best, with sharp discounts being applied to unweaned calves with no solid health programs.”
Demand for feeders was called “good for those calves at least 45 days weaned and preferably 60 days along with a couple of rounds of shots. The seasonal temperature swings have arrived and calves that show up bawling and without health records have a hard time finding eager new owners, regardless of genetics they may possess.”
Persistent rains have yard conditions wet and muddy which is also causing cattle feeders to wait on buying calves. More moisture across the mid-section of the country coupled with the early winter storm brought snow which caused consignments of calves to cancel and auctions to reschedule in the Dakotas.
An early freeze will probably be seen in Oklahoma and to parts of Texas this weekend, leaving the grazing Bermuda brown in color until it warms up again next spring.
AMS reporters said 500 to 600-pound steer calves $16 to $24 per cwt less this week than the same week last year.
For the week, the Choice beef cutout closed 3.70 higher at 215.66, while Select was 1.76 higher at 188.68, putting the Choice-Select spread at 26.98. On Thursday this week, the Choice-Select spread was at 28.97, the largest since mid-June 2017.
Cattle Slaughter under federal inspection estimated at 640,000 for the week, 6,000 more than last week and 2,000 less than a year ago.