Grimes and Plain Weekly Cattle Outlook

CHICAGO - Feb 9/07 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

After a nearly 2% growth in the U.S. cattle herd during 2005, the drought in the middle of cattle country nearly stopped the growth in 2006. The January 2006 cattle inventory showed a growth of 0.3% from 12 months earlier. The number of cows and heifers that had calved was down 0.1%, the beef cow herd was down 0.3% and the dairy cow herd was up 0.7% this January 1 compared to a year earlier.

The 2006 calf crop at 37,567 thousand head was down a few thousand head from 2005. The number of young cattle outside feedlots and not held for cow herd replacement was up 0.8% from 12 months earlier.

The three states of Missouri, Oklahoma and Texas with nearly 29% of the U.S. beef cow herd showed a decline of 3.9% in the January 1, 2007, beef Cow inventory compared to 2006. These 3 states also showed a decline of 7.1% in the number of beef cow replacements for January 1 this year compared to last year.

The number of farms and ranches with cattle on January 1, 2007, at 971,400 was down 1.1% from 2006. The number of farms and ranches with beef cows at 762,880 was down 1.0% from 12 months earlier.

The number of total cattle operations in the U.S. on January 1, 2007, was down nearly 25% from 1990.

For all of 2006 the demand for beef was down 4.4%, pork down 4.5%, broilers down 7.7%, but turkey was up 1.3% based on preliminary data. For over 20 years some people have speculated that the U.S. consumer had reached the maximum in meat consumption. Is it possible that we finally have or is it another period like the early 1980's?

For the first five years of the 1980's beef demand was down an average of 3.7% annually, pork demand was down nearly 4% and broiler demand was down an average of 1.2% annually. For this 5-year period, turkey demand was also down an average of nearly 1.4% annually.

We have had periods in the past when the demand for all meats was negative for a few years; therefore, we are not ready to suggest the odds are high that the U.S. consumer has reached a maximum in meat consumption.

The weighted average live price for fed cattle for the five-market area through Thursday at $90.04 per cwt was up $4.19 per cwt from a week earlier. The weighted average for cattle priced in the carcass was up $7.24 per cwt at $144.55 per cwt from 7 days earlier.

At Oklahoma City this week, steers over 650 pounds and heifers over 600 pounds were $2-4 higher and lighter-weight steers and heifers were $4-8 per cwt higher than a week earlier.

The price range by weight groups for medium- and large-frame number one steers were: 400-500 pounds $121-136.50 per cwt, 500-600 pounds $110.50-123 per cwt, 600-700 pounds $95-119 per cwt, 700-800 pounds $94-101 per cwt and 800-1,000 pounds $90.35-96.85 per cwt.

The wholesale price of Choice beef at $144.85 per cwt was $3.57 per cwt, higher than 7 days earlier. Friday morning Select beef was up $4.64 per cwt at $139.00 per cwt from a week earlier.

Slaughter this week under Federal Inspection was estimated at 623 thousand head, up 6.5% from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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