Meat Industry Update 8/10/2021



The live cattle trade Friday morning was extremely light. USDA reported that Nebraska sold 3862 head at $127 per cwt live for a weekly total of 39,725 head.

Iowa-Minnesota sold 1257 head at $125-127 live or $197-198 dressed for a weekly total of 34735 head. Kansas sold no cattle for a weekly total of 23,168 head and Texas sold 43 head for a weekly total of 13,152 head. The totals include negotiated cash and grid sales. Live cattle futures contracts closed higher than the day before. August closed up 42 points at $123.00 per cwt (versus $122.07 last Friday), October closed up 30 points at $127.87, December closed up 55 points at $133.32, February closed up 72 points at $137.75, April closed up 122 points at $140.45 and June closed up 115 points at $135.07.


Cattle-Beef Disparity Remains

THE disparity between live cattle prices and boxed beef cutout values remains extremely large. Fed beef processors are currently making record high margins for this time of year. This is because cattle prices have remained largely static for several months, while cutout values are soaring again. Packers remain unwilling to pay higher money for cattle as long as supplies remain ample and slaughter levels remain lower than expected. The front-end supply of cattle (on feed 150 days or more) continues to decline. But it was still 4% higher on August 1 versus last year and will still be 6% higher on September 1. Only by October 1 is it forecast to decline below year ago levels. Cattle feeders will then start to regain leverage over packers. This should result in higher cattle prices throughout the fourth quarter, which the futures market is currently anticipating.

The week before last saw live cattle prices edge slightly higher than the prior week. The 5-area steer prices averaged $121.68 per cwt live, up $0.91 per cwt on the week before. Dressed prices averaged $197.39 per cwt, up $0.61 per cwt. The same week saw the comprehensive cutouts (cuts, grinds and trim) average $269.31 per cwt, up $2.06 per cwt from the prior week. The Choice cutout rose $1.03 per cwt to average $266.49 per cwt. But the spot cutouts last week accelerated so were likely to print much higher on a weekly basis. The comprehensive's increase ended a six-week decline from a high of $323.96 per cwt the week ended June 11.


This comes from Cattle Buyers Weekly an informational subscription based newsletter for the Beef Industry that typically only insiders in the industry get. we always like to keep our customers in the know of what is going  on. 


Leave a comment

Please note, comments must be approved before they are published