Grimes and Plain Weekly Cattle Outlook

CHICAGO - Feb 15/08 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

The male-female slaughter ratio for 2007 at 1.1246 was up from the ten-year moving average of 1.09 but down from 2006 when it was 1.187. This data is consistent with the inventory of the cow herd. When the breeding herd is being increased, the ratio of males to females in the slaughter will increase.

Cow slaughter for the first four weeks of 2008 was up 5.6 percent, dairy cow slaughter was up 3.6 percent and beef cow slaughter was up 13 percent. Total cow slaughter for these four weeks in 2007 was up 7.2 percent, dairy cow slaughter was up 7.8 percent and beef cow slaughter was up 6.6 percent from 2006. The four-week data for 2008 shows total cow slaughter was up 16.4 percent, dairy cow slaughter was up 11.5 percent and beef cow slaughter was up 20.5 percent from the same four weeks in 2006.

With the demand for acres for corn, soybeans and wheat, we are likely to see some acres shift from pasture to crops. Also the size of the cattle herd needs to be reduced because of the increased cost to produce beef because of the higher feed prices. Therefore, the size of the cow herd will continue to downsize for some time.

The size of the cow herd is likely to be reduced more than the size of the total cattle herd as beef producers shift more beef production to pastures, ranges and forage from corn. The probabilities are high that young cattle will be raised to higher weights on forage before they are placed on a high grain diet.

The beef cow herd in the six states of Iowa, Indiana, Illinois, Minnesota, Missouri, and Nebraska on January 1, 2008 was down 3 percent from 2007. This compares with the beef cow herd in the U.S. on January 1, 2008 being down 1 percent. Is this a sign that farmers are already starting to use some pasture acreage for crops rather that cows?

Wholesale beef prices rallied some this week but could not hold on choice at beef down $1.58 per cwt from last Friday. Select beef at $147.87 per cwt this Friday up $10.02 per cwt for the two weeks.

The weighted average for live fed cattle for the five market area through Thursday was up $0.03 per cwt at $90.15 per cwt from a week earlier. The weighted average carcass price for the five market area was down $1.80 per cwt at $145.30 per cwt for the week through Thursday. Fed negotiated cattle trade was only eight thousand through Thursday.

Feeder cattle and calves at Oklahoma City this week were $2-4 per cwt higher than a week earlier. The prices by weight groups for medium and large frame number 1 steers were: 400-500 pounds $125-136 per cwt, 500-600 pounds $114-129 per cwt, 600-700 pounds $107.50-119 per cwt, 700-800 pounds $100-110.50 per cwt and 800-1000 pounds $93.25-103 per cwt.

Slaughter this week under Federal Inspection was estimated at 624 thousand head, up 0.6 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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