The cattle market did quite well in October. Fed Choice steers in the Amarillo feedlot area moved into the $70s by the end of the month, the highest level for the year. Feeder prices likewise added strength and $80/cwt. quotes were common, even on offerings over 600 lbs.
In general, the entire industry is doing well, particularly the cattlemen. Choice retail beef prices are 6% above a year ago indicating that demand is doing well. Even though retail margins are down 7%, packer-wholesale margins are up 27%. As a result, the cattlemen's share of the consumer beef dollar is up to 49%, compared to only 45% a year ago.
Great Plains feedlots are back on the profit side of the ledger with net margins around the $6.50/cwt. level. This year has been a good one.
USDA Outlook Sees Higher Prices The USDA recently released its livestock forecasts for 2000. The results are pretty much in line with my estimates. But, since we use very distinct market locations and slightly different weight classes, the prices may differ somewhat.
My forecasts are for the Texas Amarillo feedlot area while the government uses Nebraska Direct Choice 1,100- to 1,300-lb. steer quotes and Oklahoma City Feeder Steer 750- to 800-lb. steer prices.
Choice slaughter steers averaged $66.32/cwt. last year in Nebraska and about $64.91 this year. They are expected to average in the $66-72 area in 2000 with the second calendar quarter having the highest prices - in the $67-73/cwt. range.
Feeder steers in Oklahoma City averaged $76.19/cwt. in 1998 and will be about $74.90 this year. The 2000 forecasts look for these types to range from $78 to $84/cwt., with the third quarter recording prices as high as $79-85/cwt.
The holiday season always brings new demands on cattlemen. Normally, it is a time of year when a lot of small cattlemen think of unloading a calf or two and maybe even an old cow.
Unfortunately, many of the more traditional market outlets - the local auction - are closed because of the holidays. On top of that, the government's market news services also quite often are off during this period and, therefore, price information is hard to come by.
In addition, there is also a general slack in beef demand since "steak" is not the favorite usual holiday meal. As a result, cattle prices don't usually fare quite as well during the holiday season.
Probably, the best advice for cattlemen is to make marketing decisions soon or wait until next year to sell those animals.
Cattle and calves on feed for the slaughter market in U.S. feedlots with a capacity of 1,000 head or more totaled 10.27 million head on Oct. 1. That's 5% larger than a year ago and 8% more than a month earlier.
Marketings of fed cattle in September reached 1.96 million head, a 5% gain over last September and 8% above the 1997 figure. For the last seven months, such marketings have remained consistently above a year ago.
Placements of cattle and calves into feedlots in September totaled 2.76 million head, 4% greater than 1998 and 4% higher than the month earlier.
In September, placements weighing less than 600 lbs. totaled 629,000 head and those 600-699 lbs. reached 557,000 head. Those 700-799 lbs. totaled 758,000 head, while 800 lbs. and greater were 815,000 head.
This distribution shows a strong shift toward lighter weight placements. The lightest calves rose 44% in number while the heaviest class dropped 14%.