April 6, 2010

US cattle prices improve in first quarter

By March 30, the CME feeder cattle index has risen to US$106.23 per hundredweight, a 16% increase from US$92.26 in December 28 last year.

Grain prices became significantly more favourable through the first quarter, dropping from US$4.70 per bushel in the southern plains region on January 7 to US$4.06 on April 1. Lower feed prices have helped boost feeding margins, with Sterling Beef Profit Tracker showing margins averaging US$160.33 per head for the week ending March 27.

USDA reports showed the choice cutout averaging US$163.47 per hundredweight last week, up almost 21% from the year-ago figure of US$135.20. Packers have reported better margins, which averaged US$24.79 per head for the week ending March 27. Last week's steer slaughter totalled 637,000 head, up 3.6% from the previous week and up 4.6% from one year ago.

Last week's beef production was up 3.4% from the prior week and up 1.7% from a year ago. Live and dressed weights continue to run lighter than last year. Steer prices last week averaged US$96.24 per hundredweight live and US$155.77 in dressed markets.