Grimes and Plain Weekly Cattle Outlook

CHICAGO - Sep 19/08 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Beef exports for July were up 13.5 percent from last year while beef

imports were down 34.2 percent. Net beef imports as a percent of beef

production in July was at 0.65 percent down from 2.4 percent in June

and down from 6.4 percent a year earlier.

Beef exports for January-July were up 27.6 percent from 12 months

earlier. Beef exports for the first seven months to Mexico were up

14.1 percent, up 54.6 percent to Japan, up 35.2 percent to Canada,

down 86 percent to South Korea, up 37.3 percent to Taiwan, down 4.1

percent to Hong Kong, up 563 percent to Vietnam, down 8.6 percent to

Bahamas and up 44 percent to other countries from the same months of

2007.

Beef imports for January-July were down 23.5 percent from last year.

For these seven months net beef imports as a percent of production

declined from 7.7 percent in 2007 to 3.1 percent in 2008. This was a

decline of 4.6 percentage points and is the major reason why live fed

cattle demand for January-July was up 1.5 percent while consumer

demand for beef in the U.S. was down 3.7 percent from 12 months

earlier.

USDA September 1 Crop report showed this year corn yield at 152.3

bushels per acre, down from 155 bushels per acre in August.

The USDA Corn price estimated per bushel is $5-6 up from 4.20 from the

07-08 marketing year. This adds $48-108 to the cost of feeding one

animal. Therefore, the price of fed cattle needs to increase this much

per head or by buying feeder cattle for this much less or some

combination of the two.

Exports of beef for January-July amounted to $55.31 per head of cattle

slaughtered in 2007. For 2008 this jumped to $72.61 per head

slaughtered. Beef variety meats export in January-July of 2007

amounted to $16.07 per head slaughtered for 2008 the variety meat

exports amounted to 22.76. The combined value of beef and beef variety

meat exports in 2007 amounted to $71.38 per head slaughtered. For 2008

the value increased to $89.33 per head or an increase of 25 percent.

Retail Choice beef prices in August at $4.526 per pound were up 4.3

percent from July and up 8.8 from August of 2007. For January-August

retail beef price at $4.2529 per pound were up 2.2 percent from a year

earlier.

All segments of the beef industry benefited from these higher retail

prices. The processor-retailer margin was up 4.8 percent for

January-August. The packer margin was up 5.9 percent and the feeder

price was up 0.8 percent from 2007.

The trade expects the number of cattle on feed September 1 to be down

2.1 percent from a year earlier. The number of cattle placed on feed

during August is expected to be up 0.2 percent and fed marketings

during August are expected to be down 9.7 from last year.

Feeder cattle and calves $1-3 per cwt lower instances $4-5 lower at

Oklahoma City this week compared to seven days earlier.

The price range for medium and large frame Number One steers by weight

groups this week at Oklahoma City were: 400-500 pounds $117.50-131,

500-600 pounds $111-123 per cwt, 600-700-pound calves $102-110 per cwt

600-700-pound yearlings $110.50-115.25 per cwt, 700-800 pounds

$111-112.25 per cwt and 800-1,000 pounds $100-110.75 per cwt.

Wholesale prices for Choice beef Friday morning at $159.95 per cwt

down $0.81 per cwt for the week. Select beef at $153.62 per cwt Friday

morning was down $5.03 per cwt from seven days earlier.

The weighted average price for live fed cattle through Thursday for

the five-market area at $98.30 up $2.10 per cwt. Weighted average

carcass price at $150.90 per cwt was down $0.64 per cwt from a week

earlier.

Slaughter this week under Federal Inspection was estimated at 686

thousand head, up 6.0 percent from a year earlier.

The September 1 cattle on feed report came in a bit more positive than

the averages of the trade estimates. The number on feed was down three

percent from last year. The trade estimate was to be down 2.1 percent.

Placements of cattle on feed during August were down 2.8 percent. The

trade estimate of placements was up 0.2 percent from 2007. Markets

during August were down 8.8 percent. The trade estimate was for the

marketing to be down 9.7 percent from 12 months earlier.

A more detailed summary of the report will be in next week's letter.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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