The Cattle Range Home Page
Cattle Industry News....
The Cattle Range Mercantile


.

.

.
.

August 27th: U.S. Economy Grew Faster in the 2nd Quarter

The U.S. economy grew at a faster 3.7% annual pace in the second quarter, up from the initial estimate of growth at a 2.3% clip, the Commerce Department said Thursday. 

  •  Economists polled predicted gross domestic product would be revised up to 3.3%, but business investment was stronger than expected. 
  • Businesses increased investment by 3.2% increase of a drop of 0.6%, with spending on structures such as office buildings rising by 3.1% instead of a drop of 1.6%. 
  • Consumer spending, the main driver of U.S. economic activity, was revised up slightly to 3.1% instead of 2.9%. 
  • There were also upward revisions to state and local government spending and inventories, which could reverse in coming quarters, economists said. 
  • Corporate profits, meanwhile, rose an estimated 2.4% in the second quarter after declining by 5.8% in the first quarter. 
  • Inflation as measured by the PCE price index was unrevised, increasing at a 2.2% annual rate after declining by a 1.9% pace in the first quarter. 
  • Excluding food and energy, core PCE rose to a 1.8% annual pace from 1% in the first three months of the year.
.

August 27th: At the Margins

Expectations of a profit margin in business is not an unreasonable requirement for a sustainable business. The bottoming of the cattle cycle has been painful for many in the beef producing business and skinny to non-existent margins have been the order of the day. Frequently multiple sectors are losing money at the same time -- not a healthy situation. The industry is undergoing large and necessary pricing realignments necessary restore operating margins to the industry. This must occur at a time when the price trend line for the beef complex is heading down.

In 2014 retailers struggled to keep up with runaway beef prices. Store prices were cheap relative to the new rising cost. One thing retailers learn is the importance of not shocking the consumer and all price moves must be gradual. The increases in beef prices have continued well into the first half of this year and only now will be topping out in the grocery stores. Retailers have dealt with the short supply of beef by turning their attention to the other meats and especially those where they could create a margin. Now profits are necessary in order to turn their attention back to beef.

The beef processors have been scrambling to put together a slaughter schedule and dark days in the nation’s beef plants have been common and reoccurring. Breaking down the profit or loss statements from many of the large meat companies is sometimes difficult but most of the companies in the domestic beef processing business have lost money for most of this year. During the past two weeks that is beginning to change as packers get more trade leverage on the buy side and are able to hold together the box prices.

Feedlots have been dealing with large negative margins as they have faced short supplies of cattle this summer, caused by abundant forage on the plains, leaving them to overpay for feeder cattle hoping for a market bail but knowing that may never come. That situation might be changing as larger supplies of cattle this fall provide an opportunity for improved pricing. Yearling prices that have remained in the $225-240 area for most of the year, are now trending towards a point when they will break under $200 cwt.. The reality of red ink from breakevens in the mid $160s may not be cured by breakevens in the $150s but it will help.

Stocker operators who have been fighting a losing battle for $300+ cwt. calves are now finding some relief in the current input cost but some question whether the swap value of a cheaper calf is falling fast enough to compensate for falling yearling prices next year. Unweaned 450# calves in the southeast are now selling in the $240 cwt. range and expected to trend even lower this fall. Operators are wary of forward contracting those cattle because of the uncertainties of death loss and variable gains on winter wheat fields.

Ultimately the push back on all these sectors that have fought negative margins during the recent struggle with overcapacity will fall on the backs of the breeders. Without a reliable inventorying methodology, it is reasonable to assume the growth in the nation’s cattle herd will exceed expectations and the trend towards lower prices for everyone will happen sooner rather than later.

Ag Center Cattle Report

.

August 27th: Misleading Consumer Report About Beef

A Consumer Reports study released this week includes misleading information that could increase consumer confusion about food safety heading into the Labor Day weekend, say beef safety experts.

“I have relied on Consumer Reports when purchasing cars and electronics but unfortunately this report will not help consumers when purchasing safe ground beef. The good news is the bacteria found in the Consumer Reports tests are not the type of bacteria commonly associated with foodborne illness in ground beef,” says Mandy Carr-Johnson, Ph.D., senior executive director, Science and Product Solutions, National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff.

“As an industry, our number one priority is producing the safest beef possible. Ground beef is the safest it has ever been with greater than 90 percent reductions in bacteria such as E. coli O157:H7 and significant reductions in salmonella in recent years. The beef community continues to invest millions of dollars in developing new safety technologies with the goal of eliminating foodborne illness.”

Carr-Johnson says the only helpful takeaway from the report for consumers is that all ground beef should be cooked to and internal temperature of 160 degrees Fahrenheit and confirmed with an instant-read meat thermometer, as recommended by the U.S. Department of Agriculture.

Other food safety experts are concerned the Consumer Reports article and subsequent media coverage misleads consumers into thinking that organic and/or grass-fed beef is safer. According to the U.S. Department of Agriculture, “organic” and “grass-fed” labels do not imply any additional safety factor.

“Our concern is that leading consumers to believe organic and grass-fed beef are safer could make them think they do not need to cook those products to 160 ºF, creating a food safety concern,” says Dr. Mindy Brashears, professor, food microbiology and food microbiology, Texas Tech University. “It is important to note that bacteria was also found in the organic and grass-fed samples. The bottom-line is that no matter what the label says ground beef should be cooked to 160 ºF as a final step to ensure safety.”

The good news is the Consumer Reports study did not find pathogenic bacteria like shiga-toxin producing E. coli (STECs) in any of the samples, including conventional beef. Controlling pathogenic bacteria is the key in terms of ensuring safety. Unfortunately, the Consumer Reports study confuses that issue with the finding of generic E. coli and other bacteria that are not commonly associated with illnesses from consuming undercooked ground beef.

“Both S. aureus and C. perfringens found in the Consumer Reports study are toxin-producing bacteria that are typically associated with picnic-type food poisoning cases where food has been left out for long periods of time at the incorrect temperature, not undercooked ground beef,” says Brashears.

Also, use of the term “sustainable” in the Consumer Reports article is incorrect and misleading.  “Organic” and “grass-fed” are marketing terms that are not an accurate indicator of either sustainability or safety. Research has found that the efficiencies created by conventional methods of raising beef have led to significant reductions in greenhouse gas emissions, water use and resource consumption and energy use.

“All beef production models can be sustainable,” says Dr. Kim Stackhouse, executive director of sustainability for NCBA, a contractor to the Beef Checkoff.

“Beef sustainability is defined as producing more product with fewer inputs, which is the goal of every beef producer in this country. To cattle farmers and ranchers, sustainability means balancing environmental responsibility, economic opportunity, and social diligence while meeting the growing global demand for beef.”

From an environmental impact perspective there are trade-offs between grain and grass finished animals – it is important to recognize that the sustainability of beef is extremely complex – some of these tradeoffs include: grass finished beef have a significantly higher carbon footprint (ranging from an increase of 15-30 percent) because of the increased methane cattle produce on a grass diet and because they take a much longer time to reach slaughter weight.

“We believe that all beef can be sustainable and that all farmers and ranchers can improve their sustainability which will be critical if we are to be successful in feeding the growing global population which will require 70 percent more food by 2050,” says Stackhouse.

.

"Click Here"to view a Slide Show of Drought Monitor maps for the last 12 weeks
.

August 27th: Opening Futures Summary

October live cattle futures sank to new lows Wednesday, helped by a surging dollar and fund selling and falling below the previous low from Feb 2015. Boxed-beef values were lower as were OKC feeder steer values. October cattle dropped 1.95cents to 140.37 cents/pound Wednesday, while April futures fell 1.33 cents to 141.57. Meanwhile, October feeder cattle futures dropped .55 cents to 194.35 cents/pound, while January feeders lost 1.10 cents to 186.25..

The grain and oilseed markets firmed early Thursday morning ahead of the export sales report and after the DJIA closed 4% higher Wednesday and the Shanghai Composite closed 5.4% higher Thursday, seeming to stabilize the financial markets. U.S. index futures are higher early Thursday morning with DJ mini up 1.1%, the Nasdaq mini up 1.3%, and the S&P mini up .9%, suggesting a higher open today. Ethanol production fell to 952,000 bpd vs 965,000 but still up 4% year-over-year. Export sales trade expectations are 50,000-200,000 for old crop, and 450,000-650,000 for new. September corn futures climbed 2.25 cents to $3.64/bushel early Thursday, while December gained 2 cents to $3.7525..

China’s stock recovery Thursday strengthened the soy complex as the Shanghai Composite rebounded 5.4% and the Shenzhen composite gained 3.3%. Bargain hunting and short-covering is also adding support ahead the export sales report, which the trade expects will bring 0-150,000 tonnes for old crop and 600,000-900,000 for new crop. Brazil’s agricultural co-op, Coamo, expects to increase its soybean planted area by 3% in the coming year. September futures gained 11.75 cents to $8.905/bushel Thursday, while September soyoil climbed .51 cents to 26.63 cents/pound and September meal gained $2.6 to $327/ton..

Wheat futures followed other crops higher early Thursday as the world financial markets look to find equilibrium. Export sales expectations for the 7:30 a.m. report are 225,000 to 400,000 tonnes for 2015/16 wheat. Weather and spring wheat harvest progress appear to be optimal and will likely limit near-term gains. Still, the Sep Chicago wheat contract is trading 17 cents higher than the low for the contract set in early May 2015, at 4.74. September CBOT wheat futures gained 1.5 cents to $4.9125/bushel early Thursday morning, while Sep KC wheat rose 0.75 cents to $4.6725/bushel, and September MWE lifter 1.25 cents to $4.9625..

CME hogs corrected Wednesday after rising sharply the past two days in the face of the sell-off in the markets. Smithfield foods reported its U.S. exports to China surged 45% during the first half of 2015. The October hog contract eased .25 cents, yet strength in the lean hog index suggests futures may still see support in coming days. The expectation by traders of an imminent demand cliff, however, could limit near-term gains. Cash hog values were lower by 0.38 cents to 73.55. October hog futures lost .25 cents to 67 cents/pound Wednesday, while February slid 0.87 cents to 66.62..

.

.
.


.
August 26th: Feeder Cattle Vulnerabilities

In the U.S. in 2014, end users scrambled to compensate in various ways for the shortage of domestic beef.  By 2015, substitutes had been made, prices to consumers had been raised and the scramble ceased.  The gouging the end user took in 2014 didn’t repeat in 2015.

Over the last 10 years, the U.S. beef packing industry has shuttered plant after plant, taking nearly 90,000 head of slaughter capacity out of the market. This segment of the business had entire years of red ink in the past decade. The result of these actions and disciplined moderation of kill levels is that in the midst of the tightest fed cattle supplies in modern history, packers could close out 2015 at a near breakeven after posting modest YTD profits in 2014.

Bring on the ethanol boom and extensive multi-year drought and the beef cowherd was liquidated to the lowest level since the tail end of the baby boomers were being born. Under pressure from high grain prices and too much feedyard capacity, feedyards began to close or be converted into dairy operations, especially in the Texas Panhandle and western Kansas, reducing some of the over-capacity in bunk space.

With record profits in 2014, it was the cattle feeders turn to chase diminished feeder cattle supplies for placement. The result was record high feeder cattle prices and record high breakevens. Futures have stubbornly traded discount to cash prices this year and offered limited to lousy risk management opportunities. Industry breakevens for the remainder of 2015 easily average in the mid-$160s. Oct and Dec LC futures now near life of contract lows, $20-25/cwt below most breakevens. It is this vulnerability that seems to be the markets primary focus.

If correct, then cash feeder cattle prices, limited supplies or no, could have the most downside going forward, as margin compression keeps moving downhill.

The Beef

.

August 24th: Corn Crop Condition

.

August 21st: National Feeder & Stocker Cattle Summary
USDA-MO Dept of Ag Market News

RECEIPTS:  Auctions  Direct    Video/Internet   Total
This Week     136,300     24,500        17,400          178,200 
Last Week     129,900     53,100        46,700          229,700 
Last Year       138,400     70,100       146,200         354,700 

Compared to last week, calves and yearlings traded weak to 5.00 lower with a number of instances 10.00 lower from midweek on.  Direct sales traded steady to 2.00 lower early in the week, then turning 3.00-7.00 lower late week.  Cattle futures seem to keep the focus on the bearish side, not wanting to show much life.  Cattle futures on Wednesday reared their ugly head closing with sharp triple-digit losses, making new lows for the month.  Market psychology keeps focus on negative fundamentals, with plentiful supplies and lower prices for competing meats, struggling outside markets, lower meat exports and the focus of trading the market on what is happening right now. 

The Stock Market is on course for its lowest finish of the year, as the Dow closed over 350 points lower on Thursday dropping below 17,000 points.  Stocks fell sharply on global growth worries that rattled the markets from China to Germany and the U.S.  It was the Dow’s worst performance in 18 months.  Losses then continued on Friday as the global market rout deepened with the Dow losing over 500 points on Friday as of this writing.  Oil futures are also hovering near 6-year lows at near 40.00 a barrel.  This attitude and volatility dominates the market at this time.  Global worries also swamped the cattle complex on Friday as Feeder Cattle futures dropped limit down. 

Lack of fed cattle support made its impact and weighed heavy on the feeder cattle market this week as fed cattle trade on Wednesday was 4.00-6.00 lower on dressed sales in Nebraska ranging from 232.00-234.00.  Any leverage that tight fed cattle numbers may hold doesn’t seem to matter as demand remains light to moderate at best.  In the next 30-45 days auctions should see a good number of feeder cattle moving off pasture into feed yards.  Unless the fed cattle market gets a move up the feeder cattle market won’t be able to maintain the premiums that has been paid for yearlings and calves the previous months.  Despite lower prices this week it was still pretty optimistic in Valentine, NE on Thursday selling near 485 head of yearling steers weighing 900-950 lbs averaged 917 lbs sold with a weighted average price of 212.52.  Near 775 head of their bigger brothers averaged 964 lbs sold with a weighted average price of 205.76. 

Time is running out to take advantage of summer grilling demand and with the fed cattle market remaining stagnant, cut-out values have made some steady gains over the last couple of weeks heading into Labor Day Weekend.  But boxed-beef values closed on lower on Friday, following commodity markets lower as Choice cut-out closed down 1.56 at 244.90.  This week the Pro Farmer Crop Tour is being conducted through the Eastern and Western Corn Belt and through the Midwest.  So far corn yields in Indiana 142.9 bpa, Ohio 148.4 bpa, Nebraska 165.2 bpa and Iowa 180.2 bpa are below USDA estimates with South Dakota 165.9 bpa and Minnesota 190.8 bpa above USDA estimates and Illinois pretty much unchanged at 171.6 bpa.  The big question remains whether or not good yields in the Western Corn Belt will compensate for lower yields in the Eastern Corn Belt; so far corn yields on the Pro Farmer Tour will not increase from USDA’s estimates.  The August 1st Cattle on Feed Report appears to be neutral as Cattle on Feed was very close to expectations at 102.6 percent; Placements came in at 99 percent and Marketings at 97 percent both lighter than expected and were lowest for the month of July since the series began in 1996.  Auction volume included 54 percent weighing over 600 lbs and 36 percent heifers. 

.

August 21st: Shootin' the Bull Weekly Analysis
.
In my opinion, what was anticipated is now coming to fruition.  More so in the feeders than fats, but both still the same.  So, now what happens?  Well, with fats, I would anticipate the October contract finding some footing just north of $140.00.  There is a strong upward seasonal for October fats towards the end of August.  Most agree that the number of cattle on feed would dwindle were it not for the reduction in kills. I also noticed that month over month cold storage was down.  Although significantly higher year over year, the month over month suggests maybe storage was tapped into to keep packers from tipping the scales on price.   So, I am going to go from being bearish to a neutral stance for a little while.  A trade down to $140.00 October won't surprise me, but it may not spur any action either. 

Like the fats, what was anticipated is now coming to fruition in the feeder market.  Feeder cattle remain on the front burner as it is perceived this years fall scenario to be horrible.  Every day that one waits to sell, they are receiving a lower price.  The longer you wait, the cheaper they are.  With contract low in the cross hair, I would anticipate traders pushing feeders lower. How much, is now the question.  Remember that basis is elastic.  The back months are now over $10.00 to $15.00 lower than the index.  Even though I continue to anticipate a lower price, there could be one whale of a snap back on the futures if basis is perceived too wide.  A lower trade on Monday may lead to some profit taking.  What ever transpires, do not anticipate any settling down of prices.  Volatility is anticipated to increase. 

If traders are able to shake off the deflationary environment, the collapse in equities, and oil prices having printed a 3 handle today, maybe feeders could put on a day or two rally.  I urge producers to be exceptionally cautious about hedging cattle now that this large of a price break has materialized.  Especially so in the options.  Option premiums are swollen, and combined with the significance of the decline, does not provide a very good hedge. One may be better to just sweat it out if nothing has been done yet.  This is now one of the damned if you do, damned if you don't situations.  Short futures or buy puts and a dead cat bounce runs over you.  Don't do anything and prices continue to spiral lower.  With the move anticipated now materializing, I would attempt to get as many cattle sold as possible and relinquish hedge positions instantly upon confirmation of sale. 

Corn traded lower this week.  This is almost like making excuses for corn, but it appears that corn really does want to move higher, just every time it gets started something comes out of the blue to knock it back.  Regardless, I am not bearish corn.  I made the recommendation earlier this week to buy December of '15 & '16 corn with sell stops at $3.67 December '15 and $3.88 December '16.  This was a sales solicitation.  I anticipate corn to climb a wall of worry.  It is steep, but I anticipate corn to have a good toe hold. 

Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

.

August 21st: August Cattle on Feed Report

United States Cattle on Feed Up 3 Percent

  • Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.0 million head on August 1, 2015. The inventory was 3 percent above August 1, 2014.
  • Placements in feedlots during July totaled 1.55 million head, 1 percent below 2014. Net placements were 1.49 million head. During July, placements of cattle and calves weighing less than 600 pounds were 365,000 head, 600-699 pounds were 235,000 head, 700-799 pounds were 327,000 head, and 800 pounds and greater were 620,000 head. Placements are the lowest for July since the series began in 1996.
  • Marketings of fed cattle during July totaled 1.73 million head, 3 percent below 2014. Marketings are the lowest for Julysince the series began in 1996.
  • Other disappearance totaled 56,000 head during July, 11 percent below 2014.

Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of August 1st
Millions of Head
.

.
Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in July
Millions of Head
.

.
Number of Cattle Marketed from 1,000+ Capacity Feedlots in July
Millions of Head
.

.
Cattle on Feed by State as of August 1st
.
.
.

August 21st: USDA Cold Storage Report
  • Total red meat supplies in freezers were down 1 percent from the previous month but up 21 percent from last year. 
    • Total pounds of beef in freezers were down 4 percent from the previous month but up 24 percent from last year. 
    • Frozen pork supplies were up slightly from the previous month and up 19 percent from last year. 
    • Stocks of pork bellies were down 47 percent from last month and down 63 percent from last year.
  • Total frozen poultry supplies on July 31, 2015 were up 6 percent from the previous month and up 13 percent from a year ago.
    • Total stocks of chicken were up 6 percent from the previous month and up 22 percent from last year. 
    • Total pounds of turkey in freezers were up 7 percent from last month and up 1 percent from July 31, 2014.
.

August 21st: Canadian Cattle Inventory

The cattle inventory in Canada as of July 1 was estimated at 13.005 million head, 2.1% lower than the previous year. The lower inventories were not a surprise considering that the January 1count showed total inventories down 2.5% from the previous year. The
decline in Canadian inventories comes at a time when the cattle cycle in the US has turned a corner. So far, it has been particularly difficult for Canadian producers to rebuild the herd for a number of reasons. Sharply higher cattle prices in North America and a strong US currency have limited US beef exports into Canada and have encouraged Canadian producers to ship more feeder cattle and breeding animals to the US. 

Drought in the Canadian prairies this summer also prevented Canadian producers from retaining more heifers. Some of the heifers that would have been retained in the Canadian beef cow herd likely were sold into the US where pasture conditions last year and this year have been well above average. As a result, the Canadian beef cow herd as of July 1 was 3.792 million head, 134,400 head (-3.4%) lower than a year ago. Heifers retained for beef cow replacements were down 0.6% while heifers retained for dairy cow replacement declined 3.1%. 

The decline in the beef cow herd and fewer heifers held back for breeding stock replacement imply a smaller calf crop in 2015 and 2016. Statstcs Canada did not provide an estimate for the calf crop in 2015 but we would expect the calf crop this year to be down about 2.7-2.9% compared to a year ago. The calving ratio was quite high last year as strong feeder prices provided cow-calf operators with an incentive to better manage the herd. Lower feed costs also may have been a contributing factor. We expect the calving ratio to be high this year as well but it still is a wild card. A calving ratio closer to the long term trend would imply an even smaller calf crop in 2015. 

Currency markets and pasture conditions remain two key drivers for the Canadian cattle industry going forward. Current conditions certainly favor US feedlots and processors, who are able to outbid their Canadian counterparts. The result could be further reduction in Canadian packing capacity and higher beef prices for Canadian consumers. Canada also will likely import more beef from Australia and New Zealand and we could also see some Brazilian and Argentine fresh beef going there although their lack of country specific TRQ will limit overall volumes. 

CME Group

.

August 20th: Canadian Weekly Cattle Report

Fed cattle steady

  • Weighted average steer prices were $184.90 per hundredweight, about 50 cents higher than the previous week and heifers were $183.23, about $1 higher.
  • Most of the trade was dressed at $309 per cwt. delivered.
  • Summer lows may be behind us.
  • Most of the trade was conducted on a forward or formula pricing basis and cash trade was thin. U.S. bidders supported the market but no business was completed.
  • The cash-to-futures basis strengthened modestly to -$10.76 but seasonally it remains weak.
  • Western Canadian fed slaughter for the holiday week ending Aug. 8 fell eight percent to 30,656 head.
  • Weekly exports to Aug. 1 fell nine percent to 3,900 head.
  • The cash market will continue thin as most market-ready cattle have been contracted or formula priced.
  • The fed basis usually weakens during the third quarter so little improvement is expected. This should improve U.S. buyer interest.
  • U.S. fed trade volumes were thin last week. Live fed cattle appeared to be about $1 higher live and $2 higher dressed in the north.
  • Tyson Foods Inc. on Aug.14 said it is permanently ceasing beef production at its Denison, Iowa, plant because of the shortage of cattle.
Cows rally
  • Slaughter is running about 875 head per week behind last year.
  • D1, D2 cows ranged $134-$148 to average $141.21, up $1.28.
  • D3 cows ranged $120-$136 to average $128.75
  • Slaughter bulls were $172.50, up $3.46, which is a new record high. It is not uncommon to see bulls post highs during August. Average D1, D2 cow prices could rally to $145 before seasonal fall pressure sets in.
  • Yearlings set record
  • Yearling steers and heifers weighing more than 800 pounds established new highs, with steers 800-900 lb. averaging $259 and those heavier than 900 lb. at $247.
  • U.S. buyers are showing interest on feeder heifers and western Canadian feedlots are aggressive on yearling steers.
  • Steers 800-900 lb. are trading $41 per cwt. higher than last year, while heifers are $51 higher.
  • Heifers 850 lb. were about $11 less than their steer counterparts, and within pennies of the narrowest steer-heifer price spread this year.
  • Annual price highs for 850 lb. steers tend to be set in either August or October.
  • Steer and heifer calves for fall delivery saw generally steady prices. There appears to be a premium for yearlings coming off grass over those fed a dry lot ration.
  • With recent rains across the Prairies, some yearlings are being turned back onto pasture. Cow-calf pairs traded at $2,200 to $3,750.
Western Canada on feed
  • The number of cattle in feedlots in Alberta and Saskatchewan was 674,572, steady with last year at the same time and three percent more than the five-year average.
  • It was the first time in 11 months that inventory was steady with the year-ago number.
  • Placements in July were 59,669, up 79 percent over last year at the same time when placements were at a record low.
  • Marketings in July were 131,901, the largest this year but down eight percent from last year at the same time.
Beef rallies
  • U.S. beef cutout values surged sharply higher with generally good demand on a light to moderate offering. Choice cutout was US$245.09, up almost $10, and Select was $235.13, up $6.34.
  • Wholesalers were aggressively topping up middle and end cut inventories for the Labour Day weekend.
  • Canadian cutout values were not available.
This cattle market information is from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.
.

 May 21st Seasonal Drought Outlook
.

August 18th: Heavier Cattle Partially Offset Declines in Cattle Slaughter

USDA reduced the second-quarter beef production forecast due to lighter than expected steer and heifer slaughter during May and June. Third-quarter 2015 beef production is forecast to reach 6.250 billion pounds, approximately 1 percent higher than a year ago. Fourth-quarter production is expected to be 6.025 billion pounds, about even with fourth-quarter 2014. Total commercial beef production for 2015 is projected to reach 23.824 billion pounds, down 1.8 percent relative to 2014. Cattle feeders have partially offset reductions in steer and heifer slaughter by feeding live cattle to heavier weights.

The combination of heavier cattle entering feedlots due to favorable pasture conditions, extended periods of cattle on feed, and a larger proportion of steers in the slaughter mix as opposed to heifers has resulted in heavier average dressed cattle weights. Despite the recent setbacks in the live cattle markets, cattlemen remain motivated to raise cattle to heavier weights as a result of moderate feed prices and historically strong cattle prices. As seen in the figure below, dressed weights typically reach their seasonal lows in the second quarter before trending heavier the last half of the calendar year. However, this year, dressed cattle weights have not exhibited a normal seasonal decline and have remained relatively steady at 814 pounds during the second quarter. Third- and fourth-quarter average dressed weights are expected to be record-heavy at 824 pounds and 829 pounds, respectively. The annual average dressed weight for live cattle in 2015 is expected to reach 820 pounds, approximately 17 pounds heavier than the previous year.

Wholesale beef prices rebounded in early July, albeit modestly, after experiencing sharp declines in late May and early June. The modest advance in beef prices is more than likely tied to strong buying interest for processing beef and popular grilling items prior to the July 4th holiday, combined with smaller than expected weekly fed cattle slaughter numbers. However, wholesale beef prices declined sharply following the July 4th holiday. Packers’ margins have been squeezed, and packers are expected to remain prudent when considering the number of animals they are willing to process each week as the year continues. Wholesale beef prices are expected to moderate through the remainder of July as interest in processing loses momentum after the July-4th holiday and consumers consider eating more affordably priced pork and chicken products. Packers are expected to remain diligent in holding weekly kills at relatively low levels in order to underpin wholesale beef prices. 

Kenneth Mathews & Mildred Haley -- USDA 

.

August 13th: AccuWeather Forecasts

.

July 24th: July 1 Cattle Inventory Up 2 Percent
  • All cattle and calves in the United States as of July 1, 2015, totaled 98.4 million head, 2 percent above the 96.3 million on July 1, 2014. The last time all cattle and calves inventory for July 1 increased was 2006.
    • All cows and heifers that have calved, at 39.8 million, were up 2 percent from July 1, 2014.
    • Beef cows, at 30.5 million, were up 3 percent from July 1, 2014.Milk cows, at 9.30 million, were up 1 percent from July 1, 2014.
  • Other class estimates on July 1, 2015 and the percent change from July 1, 2014, are as follows:
    • All heifers 500 pounds and over, 15.9 million, up 2 percent.
    • Beef replacement heifers, 4.90 million, up 7 percent.
    • Milk replacement heifers, 4.20 million, up 2 percent.
    • Other heifers, 6.80 million, down 1 percent.
    • Steers, weighing 500 pounds and over, 14.1 million, up 3 percent.
    • Bulls, weighing 500 pounds and over, 1.90 million, unchanged.
    • Calves under 500 pounds, 26.7 million, up 2 percent.
  • The 2015 calf crop is expected to be 34.3 million, up 1 percent from 2014. Calves born during the first half of the year are estimated at 24.8 million, up 1 percent from the previous year. 
.

July 2nd: NOAA Precipitation & Temperature Probabilities

.

March 17th - Annual Sales Data for Cattle Farms & Ranches

The USDA’s National Agricultural Statistics Service has compiled data from the 2012 Census of Agriculture Farm Typology report profiling family farms/ranches in the United States.  For farms/ranches raising cattle or calves, the report lists a total of 740,978 operations...

  • Of those, 202,047 are listed as retirement farms, where the operators report they are retired, although they continue to farm on a small scale. 
  • On 266,250 cattle operations, NASS reports the operator has an off-farm occupation. 
  • Of the cattle farms where the operator’s primary occupation is farming, 
    • 130,774 are listed as having annual sales less than $150,000
    • 47,648 have sales of $150,000 to $349,999
    • 51,301 have sales from $350,000 to $999,999
    • 20,142 have sales from $1 million to $4,999,999
    • 2,609 have sales of more than $5 million
  • Non-family farms account for the remaining 20,207 cattle operations.
.

February 27th - Comparison by State of Heifers Retained for Replacements
.
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
710,000
660,000
7.58%
12.29%
2
Montana
425,000
430,000
-1.16%
7.36%
3
Oklahoma
405,000
325,000
24.62%
7.01%
4
Nebraska
390,000
400,000
-2.50%
6.75%
5
South Dakota
380,000
340,000
11.76%
6.58%
6
Missouri
310,000
305,000
1.64%
5.37%
7
Kansas
260,000
240,000
8.33%
4.50%
8
Wyoming
183,000
175,000
4.57%
3.17%
9
Iowa
170,000
160,000
6.25%
2.94%
10
North Dakota
164,000
170,000
-3.53%
2.84%
11
Colorado
160,000
150,000
6.67%
2.77%
12
Arkansas
141,000
137,000
2.92%
2.44%
13/14
Kentucky
135,000
150,000
-10.00%
2.34%
13/14
Tennessee
135,000
130,000
3.85%
2.34%
15
Florida
125,000
115,000
8.70%
2.16%
16
California
120,000
110,000
9.09%
2.08%
17/18
Idaho
110,000
110,000
0.00%
1.90%
17/18
Oregon
110,000
105,000
4.76%
1.90%
19
Alabama
110,000
110,000
0.00%
1.90%
20
Virginia
105,000
115,000
-8.70%
1.82%
21
Mississippi
95,000
91,000
4.40%
1.64%
22
Minnesota
85,000
80,000
6.25%
1.47%
23
Georgia
83,000
82,000
1.22%
1.44%
24
New Mexico
80,000
70,000
14.29%
1.38%
25
Utah
 78,000
70,000
11.43%
 1.35%
26
Wisconsin
75,000
70,000
7.14%
1.30%
27
Louisiana
73,000
84,000
-13.10%
1.26%
28
North Carolina
69,000
72,000
-4.17%
1.19%
29
Illinois
64,000
63,000
1.59%
1.11%
30
Washington
51,000
50,000
2.00%
0.88%
31/32
Ohio
50,000
55,000
-9.09%
0.87%
31/32
Pennsylvania
50,000
50,000
0.00%
0.87%
33
Indiana
45,000
39,000
15.38%
0.78%
34
New York
40,000
45,000
-11.11%
0.69%
35
Nevada
37,000
36,000
2.78%
0.64%
36
Arizona
34,000
30,000
13.33%
0.59%
37
West Virginia
32,000
35,000
-8.57%
0.55%
38
South Carolina
30,000
30,000
0.00%
0.52%
39
Michigan
23,000
29,000
-20.69%
0.40%
40
Hawaii
11,000
9,000
22.22%
0.19%
41
Maryland
8,000
9,500
-15.79%
0.14%
42/43
Vermont
4,000
4,500
-11.11%
0.07%
42/43
Maine
4,000
3,000
33.33%
0.07%
44/45
Connecticut
2,000
1,500
33.33%
0.03%
44/45
Massachusetts
2,000
2,000
0.00%
0.03%
46
New Jersey
1,300
1,000
30.00%
0.02%
47
New Hampshire
1,000
1,000
0.00%
0.02%
48
Alaska
900
800
12.50%
0.02%
49
Delaware
700
500
40.00%
0.01%
50
Rhode Island
500
500
0.00%
0.01%






-
Total
5,777,400
5,551,300
+4.07%
 100.00%
.

February 27th - Beef Cows: State Rankings & Change
.
.January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
. Rank
. State
2015
2014
. % Change
2015 as
% of Total
 
 
 
 
1
Texas
4,180,000
3,910,000
6.91%
14.08%
2
Oklahoma
1,900,000
1,795,000
5.85%
6.40%
3
Missouri
1,881,000
1,820,000
3.35%
6.33%
4
Nebraska
1,786,000
1,807,000
-1.16%
6.01%
5
South Dakota
1,632,000
1,635,000
-0.18%
5.50%
6
Montana
1,506,000
1,476,000
2.03%
5.07%
7
Kansas
1,477,000
1,414,000
4.46%
4.97%
8
Kentucky
1,007,000
992,000
1.51%
3.39%
9
Iowa
920,000
895,000
2.79%
3.10%
10
Florida
916,000
907,000
0.99%
3.08%
11
North Dakota
904,000
923,000
-2.06%
3.04%
12
Tennessee
883,000
864,000
2.20%
2.97%
13
Arkansas
863,000
862,000
0.12%
2.91%
14
Colorado
745,000
710,000
4.93%
2.51%
15
Wyoming
694,000
694,000
0.00%
2.34%
16
Alabama
672,000
681,000
-1.32%
2.26%
17
Virginia
637,000
637,000
0.00%
2.15%
18
California
600,000
600,000
0.00%
2.02%
19
Oregon
525,000
516,000
1.74%
1.77%
20
Georgia
489,000
500,000
-2.20%
1.65%
21
Idaho
481,000
465,000
3.44%
1.62%
22
Mississippi
468,000
477,000
-1.89%
1.58%
23
Louisiana
466,000
450,000
3.56%
1.57%
24
New Mexico
407,000
407,000
0.00%
1.37%
25
Illinois
376,000
355,000
5.92%
1.27%
26
North Carolina
363,000
355,000
2.25%
1.22%
27
Minnesota
350,000
340,000
2.94%
1.18%
28
Utah
324,000
340,000
-4.71%
1.09%
29
Ohio
282,000
293,000
-3.75%
0.95%
30
Wisconsin
275,000
250,000
10.00%
 0.93%
31
Nevada
217,000
231,000
-6.06%
 0.73%
32
Indiana
199,000
187,000
6.42%
 0.67%
33
Washington
198,000
214,000
-7.48%
 0.67%
34
West Virginia
185,000
191,000
-3.14%
 0.62%
35
Arizona
175,000
178,000
-1.69%
 0.59%
36
South Carolina
170,000
169,000
0.59%
 0.57%
37
Pennsylvania
150,000
160,000
-6.25%
 0.51%
38
New York
115,000
105,000
9.52%
0.39%
39
Michigan
112,000
119,000
-5.88%
 0.38%
40
Hawaii
69,800
71,800
-2.79%
0.24%
41
Maryland
41,000
38,000
7.89%
 0.14%
42
Vermont
12,000
12,000
0.00%
 0.040%
43
Maine
11,000
11,000
0.00%
0.037%
44
New Jersey
7,500
7,000
7.14%
0.025%
45
Massachusetts
5,500
6,000
-8.33%
0.019%
46
Connecticut
5,000
4,000
25.00%
0.017%
47
Alaska
4,300
4,300
0.00%
0.014%
48
New Hampshire
3,000
3,000
0.00%
 0.010%
49
Delaware
2,500
2,800
-10.71%
 0.008%
50
Rhode Island
1,500
1,500
0.00%
0.005%






-
Total
29,693,100
29,085,400
+2.09%
100.00%
.

February 27th - All Cattle & Calves: State Rankings & Change
..
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
11,800,000
11,100,000
6.31%
13.14%
2
Nebraska
6,300,000
6,250,000
0.80%
7.02%
3
Kansas
6,000,000
5,800,000
3.45%
6.68%
4
California
5,150,000
5,250,000
-1.90%
-5.73%
5
Oklahoma
4,600,000
4,300,000
6.98%
5.12%
6
Missouri
4,000,000
3,850,000
3.90%
4.45%
7
Iowa
3,900,000
3,800,000
2.63%
4.34%
8
South Dakota
3,700,000
3,700,000
0.00%
4.12%
9
Wisconsin
3,500,000
3,400,000
2.94%
3.90%
10
Colorado
2,600,000
2,550,000
1.96%
2.90%
11
Montana
2,500,000
2,550,000
-1.96%
2.78%
12
Minnesota
2,330,000
2,300,000
1.30%
2.59%
13
Idaho
2,300,000
2,240,000
2.68%
2.56%
14
Kentucky
2,060,000
2,110,000
-2.37%
2.29%
15
Tennessee
1,730,000
1,760,000
-1.70%
1.93%
16
Florida
1,700,000
1,670,000
1.80%
1.89%
17
North Dakota
1,650,000
1,750,000
-5.71%
1.84%
18
Arkansas
1,640,000
1,650,000
-0.61%
1.83%
19
Pennsylvania
1,530,000
1,610,000
-4.97%
1.70%
20
Virginia
1,470,000
1,510,000
-2.65%
1.64%
21
New York
1,450,000
1,450,000
0.00%
1.61%
22
New Mexico
1,340,000
1,310,000
2.29%
1.49%
23
Oregon
1,300,000
1,280,000
1.56%
1.45%
24
Wyoming
1,300,000
1,270,000
2.36%
1.45%
25
Ohio
 1,250,000
1,250,000
0.00%
 1.39%
26
Alabama
1,220,000
1,270,000
-3.94%
1.36%
27
Washington
1,150,000
1,110,000
3.60%
1.28%
28/29
Illinois
1,140,000
1,130,000
0.88%
1.27%
28/29
Michigan
1,140,000
1,130,000
0.88%
1.27%
30
Georgia
1,040,000
1,040,000
0.00%
1.16%
31
Mississippi
910,000
930,000
-2.15%
1.01%
32
Arizona
880,000
920,000
-4.35%
0.98%
33
Indiana
870,000
860,000
1.16%
0.97%
34
North Carolina
800,000
810,000
-1.23%
0.89%
35
Louisiana
790,000
790,000
0.00%
0.88%
36
Utah
780,000
810,000
-3.70%
0.87%
37
Nevada
435,000
460,000
-5.43%
0.48%
38
West Virginia
370,000
385,000
-3.90%
0.41%
39
South Carolina
335,000
335,000
0.00%
0.37%
40
Vermont
260,000
260,000
0.00%
0.29%
41
Maryland
185,000
182,000
1.65%
0.21%
42
Hawaii
135,000
133,000
1.50%
0.15%
43
Maine
85,000
85,000
0.00%
0.095%
44
Connecticut
47,000
47,000
0.00%
0.052%
45
Massachusetts
38,000
39,000
-2.56%
0.042%
46
New Hampshire
30,000
32,000
-6.25%
0.033%
47
New Jersey
28,000
27,000
3.70%
0.031%
48
Delaware
17,000
16,000
6.25%
0.019%
49
Alaska
10,000
10,000
0.00%
0.011%
50
Rhode Island
5,000
5,000
0.00%
0.006%






-
Total
89,800,000
88,526,000
+1.44%
 100.00%
.

January 19th - Mixed Cattle Outlook for 2015

Tight margins and lower grain prices are encouraging cattle feeders to feed to heavier weights, helping offset lower numbers of cattle available for feeding and slaughter, according to the latest Livestock, Dairy and Poultry Outlook report from the USDA. At the same time, improved forage conditions appear to be encouraging ranchers to retain more heifers for breeding, which could further reduce supplies of feeder cattle in the near term.

Milk prices, meanwhile, are dropping, which could result in a pickup in culling of dairy cows. The average all-milk price for 2014 was a record high of $23.97 per hundredweight, up 19.6 percent from the 2013 price of $20.05 per hundredweight. But for 2015, USDA now projects an average all-milk price of  $17.75 to $18.55 per hundredweight, down from last month's forecast of $18.45 to $19.25.

Pork will become more competitively priced as the U.S. industry rebounds from the effects of Porcine Epidemic Diarrhea. USDA reports producers have increased breeding inventory increases express strong farrowing intentions, suggesting higher pork production and lower hog prices in 2015. Hog prices are expected to average $60 to $65 per hundredweight this year, almost 18 percent below prices in 2014.

Other key points in the report include:

  • Drought continues in the Southern Plains and Southwestern United States, although its intensity has abated somewhat. The U.S. Drought Monitor, released December 30, 2014, showed an improved situation for cattle country compared with last month.
  • Despite continuing drought, the limited precipitation has allowed wheat pasture to remain in relatively good condition, providing some opportunity for weight gains in feeder cattle being pastured on Southern Plains wheat.
  • Placements in 1,000-plus-head feedlots during November dropped 4 percent below 2013. November placements were the lowest and marketings were the second lowest for the month since the series began in 1996.
  • Any significant retention of heifers for rebuilding the cow herd would offset increases in beef production due to heavier slaughter weights. However, cow-calf operators face significant incentives to sell heifers as feeder cattle sooner rather than waiting for income from their calves at least two years later.
  • Commercial red meat production for the United States in November 2014 was down 9 percent compared with November 2013. Further, Livestock Slaughter showed a 10-percent drop in commercial beef production through the month of November 2014 compared with this time last year.
  • Average live weights of commercial cattle continue higher than last November, up by 24 pounds. Since September 2014, 5-Area Fed Steer live weights have consistently exceeded 1,420 pounds.
  • November 2014’s All-fresh beef retail value was $5.98 per pound, up nearly a dollar from a year earlier. Estimated average monthly Choice retail beef prices for January 2014 through November 2014 were $5.97 per pound, 13 percent above the same-period average of $5.28 for 2013.
  • For 2015, average annual retail beef prices are expected to be slightly higher than they were in 2014. Recent drops in gas prices have given some indication of additional spending power at the grocery store. Larger supplies of pork and poultry may limit beef price increases this year.
.

May 21st - As Fundamental Change Moves an Industry

It doesn't feel any different as you walk around but beneath the surface some large and monumental plates are shifting and the foundations of an industry are undergoing change. The day to day business continues and we wake every morning to new bids and offers, new grain prices, the drought, and other continuing influences but there are some big picture developments that are occurring while we move day to day.

  • Climate: There are major changes occurring in the climate. Extreme weather patterns are more severe and long lasting. Drought in some areas continues. Flooding in other regions is causing its own problems. We can debate whether it is man made or not, but large and serious weather patterns are at work and no one impacted more than agriculture.
  • Geography: Nebraska took over Texas's spot as top feeding state. The image below clearly demonstrates the loss of feeding capacities in Texas and increases else where. Processing plants follow the feeding locations for cattle and the southern plains has lost processing capacity to the northern plains -- but both have suffered plant closings and slow downs as the herd grows smaller.
  • Basis: Cattle and grain are moving towards cash markets trading basis the futures. Cattle cash trading has ceased to be reported in Texas and lightly reported elsewhere. Poor grain basis pricing, south of Amarillo, is pressuring south plains feedyards in competitiveness.
  • Sustainability: This is a term used by everyone and understood by no one. Beef retailers are being pressured to act on assuring the industry is observing best management practices to deliver a sustainable agriculture.
  • Mandatory ID: Whether it is a trading scandal involving phantom cattle or a disease threat that can't be traced, animal ID won't go away. International trade and exports will demand it or penalize our products without it.
Downsizing is no fun and lots of money has been lost in processing and feedings. Downsizing is always painful but it also can build a better and stronger industry through change.


The Cattle Report

.
.

.
Home | Recent Listings | Cattle for Sale | List On-Line |.TCR Mercantile.| Classified Ads | Markets | Auctions
.
.
Copyright © TM - The Cattle Range - All Rights Reserved


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

August 27th: U.S. Economy Grew Faster in the 2nd Quarter

The U.S. economy grew at a faster 3.7% annual pace in the second quarter, up from the initial estimate of growth at a 2.3% clip, the Commerce Department said Thursday.  Economists polled predicted gross domestic product would be revised up to 3.3%, but business investment was stronger than expected. 

  • Businesses increased investment by 3.2% increase of a drop of 0.6%, with spending on structures such as office buildings rising by 3.1% instead of a drop of 1.6%. 
  • Consumer spending, the main driver of U.S. economic activity, was revised up slightly to 3.1% instead of 2.9%. 
  • There were also upward revisions to state and local government spending and inventories, which could reverse in coming quarters, economists said. 
  • Corporate profits, meanwhile, rose an estimated 2.4% in the second quarter after declining by 5.8% in the first quarter. 
  • Inflation as measured by the PCE price index was unrevised, increasing at a 2.2% annual rate after declining by a 1.9% pace in the first quarter. 
  • Excluding food and energy, core PCE rose to a 1.8% annual pace from 1% in the first three months of the year.
.