Thu, 30 Jan 2014
US - High US cattle and beef prices have not abated over the past week, although analysts are asking how long the current high can continue amid small losses since the weekend.
On Friday 24 January, boxed beef was reported at $50 higher than a year ago, of this, $37 has been made this year and $6.52 since the previous Friday.
Once again, record highs were surpassed last week. The five-area average for liveweight slaughter steers was $148.45/cwt for the week ending 24 January.
The observations appeared in Professor Ron Plain’s weekly analysis, which pointed out that this is $14/cwt above the peak before this month.
Questions over nearing a price top depend on a response from consumers when record numbers are seen at the retail end, Professor Plain explained.
He reminded readers that the annual fed cattle and boxed beef surge often comes in April.
This analysis came the day Friday’s Cattle on Feed report delivered bearish news to the market.
The report revealed an inventory of 10.6 million, down over 5.4 per cent year on year, but not as much as pre-report estimates of 6 per cent.
This figure is over 500,000 lower than a year ago but above the September lows of 9.9 million. Nevertheless, it is well adrift of the 2009-13 average, in excess of 11.3 million.
Report expectations differed around feedlots buying animals amid lower feed values and recent beef price action, reported Dr Steve Meyer and Len Steiner in their daily livestock report this week.
Tight supplies were explained by steer and heifer slaughter being 461,000 head - 5.7 per cent - down on the week before.
However, cow and bull slaughter has risen. The pair explained that this was expected as part of the New Year marketing of cows.
Firm prices have supported sales, although this is not expected to help come spring. Beef and dairy cows are expected to be kept in reaction to high calf prices and vastly improved milk production margins.
The report sees this impinging overall beef supply and supporting beef prices in the coming months.
Following the feedlot report, futures edged back slightly. Tuesday’s close was reported at half a cent lower at $142.55 for the February contract.
Live feeder cattle futures reported losses of around half a cent for March and April, settling at $168.35 and $168.90.
Elsewhere yesterday, choice cutout values for 600-900 pound animals was $235.80 with the choice select spread at $2.13, both lower.