The ongoing wrestling match between packers and retailers – with packers trying to get higher prices – continues to pressure cattle futures. This, in turn, is beginning to weigh on auction prices.

For wholesale perspective, consider that from the first Friday in March to last Friday, Choice boxed-beef cutout values tumbled $10.66/cwt. Select boxed-beef cutout values were $7.23/cwt. lower during the same time span.

Packer efforts to increase prices by reducing slaughter levels earlier in the month – which means more days on feed – and the extraordinarily mild winter, have yielded atypical increases in carcass weights. That adds to the challenge of increasing wholesale prices.

“While we saw packers slow chain speed earlier this year to control the supply of beef, the past few weeks have seen slaughter increase once again, increasing supplies and putting downward pressure on prices,” Emmit Rawls, University of Tennessee Extension emeritus agricultural economist, said in his Friday Livestock Comments . “Along with the increased slaughter numbers, we've also seen carcass weights steadily increase over last year, which means increased beef supply and continued pressure on prices.

According to the CME Group's Daily Livestock Report, steer carcass weights have been running around 850 lbs., which is 21 lbs. greater than last year and 22 lbs. greater than the five-year average. Overall, cattle carcass weights (steers, heifers and cows) are 18 lbs. greater than last year. The writers of the report also reminded us that, "…the increase in carcass weights disproportionately increase the amount of trimmings coming to market relative to muscle cuts," which has put downward pressure on the cutout values as well.

At the same time, grass orders that began earlier than normal appear to be mostly filled.

“The mild winter and the record calf prices pulled many feeders to market earlier than normal,” analysts with the Agricultural Marketing Service (AMS) said Friday. They explain that auction receipts are running 2.4% heavier than last year, nationwide, although receipts are 3.4% less than the five-year average. They say that explains why February placements remained relatively high, even though total calf headcounts are lower (see "Cattle On Feed Higher Again"). 
 

Cattle Prices Summary

“Most cattle marketers expect offerings to become extremely tight through the spring months with most light cattle turned out and very few yearling feeder cattle left to sell,” AMS analysts say.

Compared to the previous week, feeder and stocker cattle sold unevenly steady to $2 lower last week, with several instances as much as $5 lower. According to AMS, the full decline was noted on both calves and yearlings in major auctions markets and in Texas direct trade on weights heavier than 800 lbs. 

To be fair, heavy, widespread rains curtailed auction receipts and demand in some areas.

A couple of week ago, AMS analysts summed it up this way: , “…the feedlot replacement market seems to have hit a wall and could be in a holding pattern until supplies become much tighter or fat cattle bust completely through the $130/cwt. barrier.”  The summary below reflects the week ended March 23 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

 
Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
Dakotas 30,000
SD
ND

$195.13
$190.80

$173.19
$171.56

$162.47
$159.69

$172.12
$163.61

$160.54
$156.23

$147.89
$146.05
MO 28,600 $188.12 $169.99 $157.66 $162.32 $155.15 $141.70
OK 21,700 $195.04 $179.54 $160.90 $168.60 $156.80 $144.52
KY* 18,400 $179.95 $162.22 $146.68 $157.09 $142.67 $138.77
NE 11,600 $199.91 $177.52 $161.46 $173.81 $157.62 $147.84
KS 10,500 $198.04 $176.58 $155.48 $168.05 $156.37 $143.84
AL 8,800 $182.57 $147.42 $140.826 $160.43 $145.99 $130.005
IA 8,000 $189.12 $170.10 $157.23 $163.04 $159.36 $145.19
GA*** 8,000 $157-179 $140-170 $128-150 $145-164 $125-153 $118-138
TN* 7,500 $174.74 $159.82 $146.02 $156.44 $141.28 $128.86
WY 7,400 $190.04 $177.90 $157.44 $180.01 $155.67 $147.59
FL* 7,300 $160-190 $145-160 $141-143 $145-165 $130-157.50 $134-1424
TX 7,300 $193.42 $176.34 $157.62 $165.91 $155.60 $144.52
Carolinas* 6,800 $138-185 $133-167 $129-143.50 $133-162 $120-146 $115-136
AR 6,400 $186.06 $166.96 $160.334 $159.71 $148.52 $143.104
MS* 5,700 $170-180 $150-160 $130-1405 $145-1551 $140-150 $111-1305
VA 4,700 $175.51 $163.61 $151.37 $154.27 $150.06 $126.82
CO 3,900 $194.00 $168.56 $152.20 $172.49 $154.47 $141.86
NM 3,900 $184.03 $163.67 $150.856 $163.93 $155.262 $133.22
MT 2,400 $180.06 $157.884 $149.51 $162.05 $150.70 $144.81
WA* 2,000 $167.222 $158.00 $153.40 ** $153.89 **

* Plus #2
** None reported of the same quality at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.
8850-900 lbs.

 

 

The summary below reflects the week ended March 23 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

 

The summary below reflects the week ended March 23 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

 

The summary below reflects the week ended March 23 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

 

The summary below reflects the week ended March 23 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary: