Unexpected Weakness In Cattle Market

The following report was prepared and written by Jeff Swenson, DATCP’s livestock and meat specialist. This report draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA reports. Edited by Mid-West Farm Report.

It’s too early to say cattle markets are moving countercyclically, but the weakness in wholesale prices is unexpected heading into November. The cash market is mostly steady, but weakness developed early this week.

Cattle feeders are doing their best to hold out for higher prices. With softness in the cutout, packers are reluctant to up country bids. There are reports of growing showlists and that could push cattle weights higher.

The Choice beef cutout averaged $304.70 last week, a drop of $1.78. More concerning was that the value dropped to $302.34 last Friday and was lower again to start this week. Cash prices were called 60 cents higher last week, with the weighted beef breed steer average of $184.35.

Harvest was estimated to be 632,000 head, making it down 4,000 from the previous week and 36,000 below a year ago. Both Live Cattle and Feeder Cattle futures have been under pressure. Feeder cattle prices were lower last week, and that impacted feeder cattle runs this week, as many potential sellers take a wait and see position.

The fundamentals remain positive in the beef sector. In the meantime, the market seems to be waiting for solid direction. The later days of this week brought Supply and Demand, Monthly Trade Data, and Consumer Sentiment reports. Many analysts think the data from those reports will bring bullish news to the market.

Fed cattle prices were steady to weak, High Choice and Prime beef breed steers and heifers brought $172 to $178/cwt with highs of $184/cwt. Choice steers and heifers ranged from $165 to $172/cwt. with mixed grading and those likely to grade Select bringing $155 to $165/cwt. Holstein steers were steady to weak, bringing $150 to $158/cwt with some lots from $158 to $162. Lower grading steers brought $125 to $150. Silage fed, under finished, or heavy dairy breed steers brought $75 to $125/cwt. Dairy x Beef steers were bringing $126 to $173 with a few to 180/cwt.

Cows were steady to $2 lower. A bulk of the cows brought $65 to $95/cwt with some fleshier dairy and beef cows selling to $110/cwt with reports of individuals selling higher. Doubtful health and thin cows were bringing $65/cwt and down.

Dairy breed bull calves were steady, bringing $100 to $300/cwt with some heavier, well-managed calves selling to $400. Beef and Beef Cross calves were lower, selling up to $700/cwt.