Fed Cattle Prices to Continue to Set Historically High Prices
Tuesday, February 21st, 2012
New record-high prices were recorded last week as cash fed cattle traded $4 to $6 per hundredweight higher.
Southern feedyards sold cattle at $128 to $129, with tops in Texas at $129.50. Northern feedyards traded at $128 to $129 live and $202 to $203 dressed. Such prices take the value of a finished steer to nearly $1,700 per head.
Higher cattle prices last week were fueled by rising futures prices and advancing boxed beef prices. Choice boxed beef cutout values were quoted Friday at $190.45, and advance of $3.80 from the previous week. Select values were $185.90, an increase of $4.02 from the Friday before. The Choice/Select spread was $4.56, narrowing 21 cents from the prior week.
Higher cattle and beef prices are pushing retail prices higher, and January saw new record levels. The USDA All Fresh retail beef price was $4.64 per pound, up 9 cents from December and 39 cents higher than one year ago. The USDA Choice retail beef price was $5.09 per pound in January. That compares with USDA's retail pork price of $3.50 per pound in January and the broiler price of $1.86 per pound in January.
Despite the higher boxed beef prices, packers continue to struggle with negative margins. That scenario may continue for a while as fed cattle supplies are expected to tighten over the coming six to eight weeks, supporting ideas of cash fed cattle prices climbing into the low-$130s per hundredweight.
Not to be left out of the party, feeder cattle prices posted another advance last week, with steers and heifers firm to $3 per hundredweight higher. Calf prices were quoted at $2 to $5 higher on the growing plague of grass fever among stocker operators. But demand for both feeders and calves remains high, leaving buyers to bid up or sit on the sidelines.
USDA Market News reporter Corbitt Wall says the best demand is found for "short-yearling 500-750 pound stockers possessing a relatively thin condition plus the stretch and frame that grazers know will yield efficient weight gains on early grass."
Wall says such demand is typical of March and early-April markets, "but supplies are so tight and the weather has been so mild that these types have been high priority all winter. Calls for stocker calves have been pouring into Southeastern order buyers with the cumulative weighted average price across Dixieland for 400 to 500 pound steers up to $184.87 per hundredweight, and 500 to 600 lb steers averaged 168.69 before freight, commission, and additions. "
Last week's auction receipts totaled 213,900, compared to 226,400 the previous week and 306,700 last year. Direct sales of stocker and feeder cattle totaled 77,500, with video/Internet sales at 46,300. The weekly total was 337,700, compared to 421,000 a year ago.