Catch a roundup of each week’s cattle-market activity every Friday afternoon at beefmagazine.com. Steve Kay, editor and publisher of Cattle Buyers Weekly, the number-one marketing and business newsletter for the North American meat and livestock industry, will provide the week-ending summary.
For more info on Kay’s Cattle Buyers Weekly subscription newsletter, visit www.cattlebuyersweekly.com, phone 707-765-1725, or email info@cattlebuyersweekly.com.
Weekly Update: Feb. 3, 2012
The live-cattle trade Friday morning was moderate at lower prices than last Friday. USDA’s mandatory price reporting (MPR) service reported that Nebraska sold 18,954 head at an average $198/cwt. dressed or $123.79 live for a weekly total of 32,696 head. Iowa-southern Minnesota sold 15,893 head at $197 dressed or $123.72 live for a weekly total of 24,556 head. Kansas sold 1,105 head at $123.00 live for a weekly total of 1,440 head. Texas sold 251 head at $123.00 live for a weekly total of 3006 head.
The MPR weekly totals include negotiated cash and grid sales. MPR showed few cattle sold on the Southern Plains but USDA’s central daily report reported that trading was moderate there at $123.
Live-cattle futures closed lower. February closed down 152 points at $123.62 ($124.70 last Friday), April closed down 150 points at $127.40, June closed down 125 points at $126.85, August closed down 90 points at $128.85, October closed down 65 points at $132.32 and December closed down 65 points at $133.17.
The week’s cattle slaughter was an estimated 589,000 head (vs. 626,574 head last year), with Friday’s kill 102,000 head and Saturday’s kill 5,000 head. Year-to-date FI slaughter is an estimated 3.023M head, down 5.2% from 2011’s 3.190M head. Hog slaughter year to date is up 0.8% on last year.
Boxed-beef cutout values were steady to weak on light to moderate demand and offerings. The Choice cutout declined $0.07/cwt. from the day before to $183.12/cwt. ($184.13 last Friday), while the Select cutout declined $0.45 to $178.08. The Choice-Select price spread was $5.04/cwt. (vs. $4.91 last Friday). The reported spot boxed-beef trade for the week was 831 loads of fabricated cuts, 30.0% higher than the 639 loads the week before.
Packer margins for the week were negative by $92.01/head, compared to a negative $97.41 the week before, according to HedgersEdge.com.
The projected cattle-feeding margin (cattle placed on feed Feb. 3, with an expected finish date of July 7) is a negative $62/head, according to the North American Institute for Beef Economic Research (NAIBER). This compared with a negative $75/ head the week before. The lower and upper profit potential is a negative $294/head to a positive $170/head, vs. a negative $310/head to a positive $163/head last week.
NAIBER’s risk analyzer calculates the risk associated with feeding cattle based on these and other inputs. As noted, some inputs will be updated each week while others, such as daily gain and death loss, will be adjusted on a seasonal basis. People wishing to calculate their own projected cattle feeding returns, using their own inputs, can do so by going to NAIBER's Cattle Feeding Return Risk Analyzer at www.naiber.org/cattleriskanalyzer.
NAIBER also posts historical data and two graphs of its weekly calculations. These can be found under the “expected Kansas feeding return” icon. Also available there is a link to a spreadsheet that contains some of the details of the calculated inputs.
Have a good week,
Steve Kay