March 26, 2009

US cattle is gaining weight now due to slowing beef sales, which is expected to improve during the spring grilling season.

 

The average weight of steers and heifers set monthly records in January and February, and remained large in March, according to the Livestock Marketing Information Centre (LMIC).

 

The larger cattle are producing about 25 pounds more beef per animal than a year ago, and about 40 pounds more than during 2003-2007, said LMIC livestock economist Jim Robb.

 

Weak demand is the real problem facing the industry instead of excess supply, said Kansas State University livestock economist James Mintert.

 

Young cattle had entered feedlots last year at much heavier weights because high feed prices encouraged ranchers to keep the animals on pastures longer.

 

Once in the feedlots, the cattle gained weight faster than usual because of a relatively mild winter in Nebraska, Kansas, Oklahoma and Texas.

 

Cattle sales then slowed due to feedlots resisting unprofitable bids by beef plants which are cutting production because of poor sales during the recession.

 

The National Cattlemen's Beef Association said last week choice-grade steaks were selling as low as US$5 per pound in grocery stores, down sharply from US$7-9 a year ago.

 

Yet sales are not moving fast enough for cattle producers who cannot sell cattle at a rapid pace or at profitable prices.

 

More beef per animal prevents prices from rising to levels that would provide cattle producers a profit on sales to beef plants.

 

The number of cattle slaughtered last week decreased 4.5 percent on-year to 615,000 head, said the USDA. US beef production also decreased 2.1 percent to 486.1 million pounds.

 

In the past, heavier cattle signalled backlogs of animals of in feedlots, which pushed down cattle prices as producers tried to reduce excess supplies.

 

The livestock economists said the situation would correct quickly if demand picks up.