In the Cattle Market
Weights moderate a little.
Record-large, some might say excessive, fed-cattle weights continue to weigh on the cattle market. Weights and backed-up marketings have been a significant factor in lower cattle, feeder and calf prices this fall.
Normally, cattle dressed weights peak this time of the year before falling seasonally. Lower weights could portend working through the supplies of heavy cattle leading to reduced beef production and some support for prices.
Steer weights the second week of November averaged 920 pounds (lb.), 18 lb. heavier than a year ago. That was 7 lb. below the week before and the lowest since the week of Sept. 26. Heifer dressed weights declined by a pound from last week to 848 lb. The 72-lb. difference between steer and heifer dressed weights was the smallest since mid-May.
USDA’s November Cattle-on-Feed Report will be released on Friday. Analyst expectations indicate that October marketings will be down about 5% from a year ago. It is important to remember that October 2015 had one less slaughter day than October 2014. While marketings and slaughter should be below a year ago, daily average slaughter and marketings were likely very close to last year.
Placements are expected to be below a year ago. Significant financial losses likely contribute to lower placements. The number of cattle on feed Nov. 1, 2015, is expected to be about 2% higher than last year.
Torrential rains in Central and East Texas during the last month have made a significant dent in what was a growing serious drought condition. The latest drought monitor indicates that no part of Texas remains in the most serious D3-D4 drought categories, and only a few spots of dry conditions are left. Rain has likely helped calf prices in local markets.
Editor’s Note: David Anderson is a professor and extension economist at Texas A&M AgriLife Extension Service. Reprinted with permission, this article was originally written for the Livestock Marketing Information Center, available online at http://lmic.info.