Fed Cattle Trade ‘Soft’ As Cash Prices Decline Again
Cattle feeders saw another steep decline in cash fed cattle prices last week as the fallout from the nation-wide coronavirus outbreak continues. Fed cattle trade was called “soft” and in “very light volumes” across the major trading regions. Trades occurred at $105 live and $168 dressed, or $7 to $12 lower.
While negotiated cash fed cattle sales have trended higher recently, last week’s negotiated sales – 28,923 head nationwide – was the second smallest volume reported since mandatory reporting started in 2001, Agricultural Marketing Service (AMS) reporters said. The smallest volume of negotiated sales was reported the week of December 15-19, 2003, the week prior to the first reported case of BSE in the United States.
Beef packers face significant challenges keeping their plants running amid the COVID-19 outbreak. The JBS plant in Greeley will be closed Monday and Tuesday for cleaning after dozens of employees have tested positive for the virus. Other beef packers are slowing their line speeds in an attempt to allow employees to remain a safe distance from other workers. Reports of absenteeism is high at some plants.
Industry analysts say weekly production may be cut as much as 10% or more over the next three to four weeks.
“Never before in history has an instant red meat short-fall been created almost out of thin air, giving end users no time to prepare,” says Cassandra Fish, author of The Beef Read, published by Consolidated Beef Producers. “Supplies of hogs and cattle may be plentiful but with harvest slowed significantly, the consumer will see much less pork and beef available in stores for a few weeks and increasing slaughter to refill empty meat cases- which occurred in March, won’t be an option.”
Estimated slaughter of fed cattle at federally inspected plants was 536,000 last week, 90,000 less than the previous week and 103,000 less than last year.
The Choice beef cutout fell $6.51 per cwt. for the week, closing Friday at $223.93. The Choice cutout has declined $27.44 per cwt. (11%) the last two weeks. Select fell $7.51 to close Friday at $208.33. Over the past two weeks Select has declined $23.11 per cwt. The Choice/Select spread on Friday was $15.60 per cwt.
Feeder steers and heifers sold at auction $3 to $7 per cwt. lower last week. AMS reporters said the best demand was for grazing calves, though a frost Friday in the Midwest and Northern Plains may slow grass growth.
Auction volume was reported at 112,900, down 62,200 head from the previous week. The same week a year ago saw 190,400 head of feeder cattle and calves sold at auction, AMS reported.
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