The August fed cattle market in the Amarillo feedlot area traded lower until mid-month but then recovered slightly. In the final weeks, the movement was light, and markets were untested. U.S. Choice slaughter steers started September in the $64 to $65/cwt. level.
In contrast, feeder cattle and calf prices displayed some improvement in the middle of the month but showed considerable volatility. Heavier weight feeder price quotations have become very rare in the Amarillo livestock auction reports. As a result, other markets or direct sales may have to be substituted in our tables to get a consistent flow of price information.
Beef Demand, Concentration Notes - Some of the optimism about improved beef demand this year may be fading. Retail prices for Choice beef moved off the record highs set in June, but they are still 4% above last year. Cattle slaughter in July was off 4% from a year ago. Even with higher slaughter weights, commercial beef production for July was still 2% below a year earlier.
Despite lower beef production and a reduced total commercial red meat production, cattle prices fell substantially. By August, Choice fed cattle in the High Plains were below year-ago levels.
- The U.S. Department of Agriculture (USDA) just released its Packers and Stockyards Statistical Report. In 1999, four packing firms accounted for 81.4% of the steer and heifer slaughter in the U.S. That figure was 80.4% in 1998. These four firms acquired 24.9% of their cattle through their own packer feeding, forward contracts and marketing agreements.
Cattle On Feed Cattle and calves on feed for the U.S. slaughter market in 1,000-head-or-more-capacity feedlots totaled 10.2 million head on Aug. 1. That's 11% greater than the year-ago level. The largest numerical increase came in Texas with a 240,000-head gain. The greatest percentage gain was in Nebraska with 15% more cattle on feed.
Fed cattle marketings in July totaled 2.1 million head, 2% below last July. Five states reported larger marketings; Nebraska was down 10%.
Feedlot placements of cattle and calves into feedlots in July totaled 1.9 million head, 6% above a year earlier. Texas and Nebraska had 8% gains.
Placements weighing less than 600 lbs. totaled 424,000 head; those 600-699 lbs. totaled 366,000 head; the 700- to 799-lb. class totaled 597,000 head; and animals 800 lbs. and greater totaled 530,000 head.
Larger Marketings Loom With July feedlot placements moving back over year-ago levels, the expectation of larger marketings this winter looms again. Fall feedlot movement appears to be modest, but supplies could become burdensome by year's end.
Fed cattle may show a price pattern the rest of 2000 similar to a combination of both last year and 1998. That would mean price stability with some possible improvement in the September-November period, and some weakness following that into the new year.
Feeder cattle and calf prices are expected to follow the direction of feds. The recent weakness of that market has pushed feedlot returns into the negative side of the ledger. That will impact directly upon the demand for feeder cattle and calves.
At the same time, the availability and market timing of such animals will be strongly influenced by drought conditions in the South. Despite these negative factors, returns to cow/calf ranchers this year may be the best ever.