Grimes and Plain Weekly Cattle Outlook

CHICAGO - Apr 11/08 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Cow slaughter for the year of 2008 through the week ending March 22

was up 3.6 percent from 2007 and up 19.4 percent from the same weeks

in 2006. Dairy cow slaughter for the period was up 1.7 percent from

2007 and up 14.9 percent from 2006. Beef cow slaughter for this period

in 2008 was up 5.3 percent from 2007 and up 23.3 percent from 2006.

For the four weeks ending March 22, all cow slaughter this year was up

1.4 percent from twelve months earlier. Dairy cow slaughter was up 1.3

percent and beef cow slaughter was up 1.6 percent from the same period

in 2007.

The male-female slaughter ratio for January and February of 2008 was

quite close to this ratio a year earlier.

This data all supports the belief that cattle producers are continuing

to reduce the cow herd because of high feed costs. How much the total

cow herd will need to be reduced is not completely predictable but the

reduction phase is likely to last for some time.

Average slaughter weights of carcass for all cattle the week ending

March 22 was up ten pounds from a year earlier. Steer carcass weights

at 826 pounds were up 18 pounds and heifer carcass weights at 765

pounds were up 11 pounds from twelve months earlier.

Beef production for January and February 2008 was up 3.7 percent from

2007 and the heavier slaughter weights contributed to the gain.

Wholesale beef prices this Friday morning showed Choice beef at

$143.20 per cwt up $6.07 per cwt compared to a week earlier. Select

beef at $142.03 per cwt was up $5.54 per cwt from seven days earlier.

Fed cattle trade was quite large through Thursday last week, therefore

the full week price was quite close to the price through the first

four days of the week.

The weighted average price for live fed cattle for the five-market

area at $86.60 per cwt through Thursday up $0.75 per cwt from last

week. The weighted average carcass price for fed cattle through

Thursday for the five-market area is at $139.00 up $0.75 per cwt from

seven days earlier. Did not have a good market test because only 8.4

thousand head in negotiated trade through January.

Feeder cattle 600-700 pounds were $2-3 per cwt higher and over 700

pounds was steady to $2 higher after a steady opening. Steer and

heifer calves were steady to $2 per cwt lower this week then last week

at Oklahoma City.

The range in prices by weight groups for medium and large frame Number

One steers were: 400-500 pounds $120-131.50 per cwt, 500-600 pounds

$113.50-126 per cwt, 600-700 pounds $107.25-118.25 per cwt, 700-800

pounds $86.75-105.50 per cwt and 800-1000 pounds $75-87.75 per cwt.

Four to five hundred weight steers at Oklahoma City were $6-7 per cwt

below a year earlier and 700-800 pounds were $16-17 per cwt less than

last year this week at Oklahoma City. Most of this decline in feeder

cattle price is a result of higher corn prices.

Slaughter this week under Federal Inspection was estimated at 645

thousand head, up 5.2 percent from a year earlier.

The cattle industry received bad news Thursday morning. USDA increased

the total corn use for the 2007-2008 market year to exceed last year’s

record corn production by 36 million bushels and ending stocks are now

projected to be 21 million bushels below a year earlier. How high will

corn prices be in the next year? It now looks like they will probably

exceed $6 per bushel. The cattle industry now needs to get more

serious about reducing herd size.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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