Grimes and Plain Weekly Cattle Outlook

CHICAGO - Oct 3/08 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Cow slaughter continues to rise well above a year earlier. In fact,

the rate of cow slaughter has sped up in the most recent slaughter

data available.

For the year through the week of September 13, total cow slaughter was

up 9.6 percent, dairy cow slaughter was up 4.4 percent and beef cow

slaughter was up 13.6 percent from the same period in 2007. For the

four-week period ending September 13, total cow slaughter was up 15.7

percent, dairy cow slaughter was up 10.4 percent and beef cow

slaughter was up 20.3 percent from 12 months earlier.

For 2008 through the week ending September 13, total cow slaughter was

up 18 percent, dairy cow slaughter was up 12.5 percent and beef cow

slaughter was up 30.3 percent from two years earlier.

This level of cow slaughter is strong evidence that the cow herd is

being downsized at least at a relatively slow rate. With five dollar

plus or minus corn prices per bushel, we need to reduce the size of

the herd substantially to get supply in live with demand at the

current demand for beef.

Beef demand at the consumer level for January-August was down five

percent, pork was down 4.9 percent but broiler demand was up 2.9

percent and turkey demand was up 4.6 percent from 12 months earlier.

The evidence supports the belief that the weak general economy and

high energy prices are contributing consumers to move to lower priced

protein.

The good news is that the demand for fed cattle is close to the same

level as a year ago due to larger beef exports and population growth.

Feeder steers and heifers under 800 pounds at Oklahoma City this week

$2-3 per cwt lower, cattle over 800 pounds $4-5 per cwt lower. Steer

and heifer calves $4-5 per cwt lower with in store of $6-8 per cwt

lower than last week.

The range in price of medium and large frame No. 1 steers by weight

groups at Oklahoma City this week were: 400-500 pounds $122-129 per

cwt, 500-600 pounds $104.50-124 per cwt, 600-700 pound calves $90-101

per cwt, 600-700 pound yearlings $103-110 per cwt, 700-800 pounds

$103.75-110.25 per cwt and 800-1,000 pounds $97.25-105.50 per cwt.

The weighted average live price for fed cattle through Thursday for

the five-market area at $96.00 per cwt down $2.10 per cwt from a week

earlier. The weighted average negotiated carcass price through

Thursday for the five-market area at $148.00 per cwt down $3.85 per

cwt from seven days earlier.

Wholesale beef prices Friday morning showed Choice beef at $152.69 per

cwt down $3.24 per cwt from a week earlier. Select beef at $146.95 per

cwt down $3.18 from Friday last week.

Slaughter this week under Federal Inspection was estimated at 630

thousand head down 6.1 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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