June 28, 2004

US Cattle Demand Continues to Rise

Compared to last week, US yearling feeder cattle sold steady to 2.00 higher. Stocker cattle and calves made a quick rebound from last week's minor setback as prices ranged 1.00-5.00 higher, with the bulk of the lightweight cattle being sold in the Southeastern markets. 

Cash fed cattle prices also made a nice recovery early this week to get back to 90.00 live and 140.00 dressed.  Normally, the onset of summer brings lackluster cattle markets and sweltering heat to begin the "Dog Days of Summer".  This is not so this week. The demand for all classes of cattle continued to grow and temperatures were unseasonably cool and comfortable throughout the majority of the nation. Several major cattle production areas received some much-needed moisture, especially in Oklahoma where practically the entire state got a good soaking.

There were nearly 5,000 head on offer for the contest/auction and prices were very respectable with over 300 head of 800-900 lb steers averaging over 115.00.  However, this week's top quotes came from the Cornbelt where the Bassett, Nebraska Livestock Auction featured 3100 head and never before seen, thought, or heard of prices. 

Highlights included a load of fancy 759 lb steers at 132.50, two loads of similar 840 lb steers at 127.00, and two big loads of fancy steers weighing 971 and selling for 116.75.  Many folks read recent record quotes in the Cornbelt and shake their head while blaming the stereotypical old-school farmer feeder.  However, the bulk of these top dollar cattle are reportedly going into commercial Midwestern feedyards and being fed for premium programs. 

The cattle industry can hardly enjoy this market dream without fearing the nightmare price plunge that many people fear will follow.  But, fundamental indicators do not show any nearby change in the tight supplies or the strong demand.  The only factor strong enough to knock the cattle market off its pedestal is a major disease or food safety scare.  This is why most producers are being surprisingly open-minded to the proposed National Animal Identification Program that (if successful) could give a rapid trace to a disease outbreak.

The Joplin Regional Stockyards held the first large-scale commercial feeder cattle auction where the entire offering was carrying Radio Frequency Identification Ear-tags (RFID).  The Stockyards reported an encouraging rate of success in scanning the tags three separate times and a relatively low level of inconvenience.  They also sold 239 head of fancy, all natural 516 lb steers from the Circle A Angus Ranch for 148.00.  This week's reported auction volume included 44 percent over 600 lbs and 47 percent heifers.   

Source:  AMS/USDA ¨C National Feeder Cattle Summary