Feeder cattle weighing more than 600 lbs. sold unevenly steady last week from $3 lower to $2 higher, according to the Agricultural Marketing Service (AMS) Friday. Stocker cattle at lighter weights trended steady to $3 lower, with buyers especially harsh at 550-600 lbs.
Feeder Cattle futures were an average of 88¢ lower across the board week-to-week.
“Persistently dry conditions over the last two years throughout the central portions of the country have caused unprecedented liquidation of breeding stock, movement of stocker cattle into confined feeding operations, and early marketings of home-raised calves in an effort to preserve cow herds,” AMS analysts say. They note that there are virtually no green feeders, few yearling feeder cattle, and new-crop calves are predominately fresh off their mamas.
“Traditional winter backgrounders have been slow to enter the market, despite the smallest calf crop in 60 years,” AMS analysts say. “Most believe there is still plenty of demand but most are conserving their feed, water and medicine until later in the season.”
Part of that has to do with the fading wheat pasture prospects that were so promising just a few weeks ago.
In Oklahoma, for instance, Derrell Peel, Oklahoma State University Extension livestock marketing specialist, explains in his weekly market comments, “Stocker demand has faltered as potential wheat pasture is far from a reality at this time. Stocker producers are in a wait-and-see mode before committing to stocker purchases.”
“In most major marketing areas this week, the cost of a 475-lb. calf was within $50 of one weighing 625 lbs., and in many documented cases the lightweight calf actually cost more,” AMS analysts explain. “It's not that bidders don't realize that each of those 150 lbs. should at least be worth the cost of the bigger calf per pound. Buyers simply want to grow that lighter calf on 2013's grass and fatten them in 2013's corn.”
Cash fed cattle trade finally began Friday with light-to-moderate demand in the Texas Panhandle at $126/cwt., which was $1 lower than the previous week.
Though futures markets faltered during the week, pressured by the higher dollar and negative outside markets, Live Cattle futures ended the week mostly narrowly mixed. And, that was without any apparent bounce in the wholesale market that folks had hoped for in the aftermath of Hurricane Sandy. The Choice boxed-beef cutout value was $1.37/cwt. lower week-to-week. Select was $2.39 lower week-to-week.
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The week’s market action was overshadowed by outside markets. In turn those outside markets were dominated by last week’s presidential election.
Wall Street was either unimpressed by the selection of Barack Obama to a second presidential term, turned its attention back to Washington gridlock and the looming fiscal cliff, or both. The Dow Jones Industrial Average plummeted more than 300 points the day after the election, and ended up 277 points lower week to week. The broader S&P 500 was 34 points lower week-to-week.