Grimes and Plain Weekly Cattle Outlook

CHICAGO - Sep 7/07 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

The demand for all meats with the exception of broilers was stronger at the consumer level for January-July of 2006 than a year earlier.

Consumer beef demand was up 0.8 percent, pork was up 1.7 percent, turkey was up 2.2 percent but broiler demand was down 1.1 percent compared to the same months last year.

Live fed cattle and live hog demand showed impressive growth for January-July with fed cattle demand up 3.9 percent and live hog demand up 3.3 percent compared to 12 months earlier. At least a portion of the increase in live fed cattle demand was larger beef exports.

Feeder cattle prices were not well tested this week because of the Labor Day holiday at Oklahoma City.

Feeder cattle prices at West Plains, Missouri showed feeder steers weighing 400-500 pounds $125-143 per cwt, 500-600 pounds $120-128 per cwt, 600-700 pounds $115-123 per cwt, 700-800 pounds $117 per cwt and 800-900 pounds $109.50-112 per cwt.

Cow slaughter for the week ending august 18th was down 7.5 percent from a year earlier. This was the fourth consecutive week with cow slaughter below a year earlier. However, cow slaughter for these four weeks in 2006 was 25 percent above a year earlier. Therefore, most or all of the difference between this year and last was due to exceptionally large slaughter last year.

Cow slaughter for the year through the week ending august 18th of 2007 was 8.8 percent below the same period in 2006. With calf slaughter through July up 16 percent from 12 months earlier and a smaller number of beef heifers being held for herd replacement on July first, we still believe cattle producers are reducing the cow herd at a slow rate.

The negotiated fed cattle trade through Thursday at three thousand head was not a good test of prices for the holiday-shortened week.

Wholesale beef prices Friday morning showed Choice beef at $147.78 per cwt, up $0.10 per cwt from last week. Select beef was up $1.67 per cwt at $142.05 per cwt Friday morning.

The weighted average price of fed cattle live in the negotiated trade through Thursday was $93.50 per cwt, down $0.88 per cwt from a week earlier for the five market area. The negotiated carcass weighted average through Thursday for the five market area was down $1.25 per cwt from seven days earlier at $147.25 per cwt.

The future market continues to show the potential for strong fed cattle prices for the next year with the price from $95.40 to 101.25 per cwt at the close Thursday. If we can maintain current demand conditions for fed cattle these prices look realistic.

Slaughter this week under Federal Inspection was estimated at 598 thousand head up 1.2 percent from last year.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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