January 23, 2009

Data from the High Plains Cattle Feeding Simulator show that US prices for feed grains and proteins, except for alfalfa hay, peaked during the summer 2008 and went downward through the harvest season.

The price spikes spurred high feeding costs at least for the near term, for cattle fed through the summer and marketed in October 2008. However, cattle feeding margins continued to show heavy losses through December 2008, more a result of declining fed cattle prices than the feed price declines for cattle marketed during the last quarter of 2008, the report said.

Except July, monthly net placements of feeder cattle in 1,000-headplus feedlots were lower, on-year for March through November 2008. Despite reduced placements, the unpublished data indicate that monthly average placement weights, after April 2008, were likely heavier than year-earlier weights. Consistent with a positive correlation between placement weights and slaughter weights, monthly federal-inspected dressed weights for steers and heifers averaged above weights for the same months in 2007 through October 2008. November 2008 weights, below their year-earlier average, were an exception.

In 2008, total commercial cow slaughter made up a larger-than-normal share of total commercial cattle slaughter. Dressed weights for cows are generally lighter than steer and heifer weights. Further, the higher-than-usual 2008 cow slaughter resulted in even lighter dressed weights for cows compared with the same months in 2007. As a result, average dressed weights for all cattle slaughtered were above year-earlier weights from February through June 2008 and then below year-earlier weights through November. Correspondingly, monthly beef production in 2008 was above 2007 beef production for most of the first half of 2008 and below 2007 levels for the second half. The net result is that 2008 beef production is shaping up to be virtually unchanged from 2007 production.