Bad weather kicks down US feeder cattle prices

US feed cattle and calves sold weak to 5.00 lower compared to last week as bad weather ravaged the country.

The season's first huge winter storm stretched from Arizona and New Mexico to Colorado, Kansas and finally to the entire Midwest and Northern Plains. The Northern feedlot areas of Nebraska and Iowa suffered the brunt of the storm with up to 14 inches of snow and drifts piling up like giant ocean waves.

Feeder cattle demand plummeted as roads became blocked and feedlots went into storm defense mode by struggling to take off those on hand and did not want any new arrivals.

Many mid-to-late week auction markets cancelled their sales this week and large supplies of calves that were intended to be marketed were forced to stay home as producers struggle to hold their weight together.

Several beef processing facilities were also forced to cancel operations on Wednesday (Dec 9) and the estimated cattle harvest for those shifts was 22,000 head less than the previous week.

The CME Live Cattle futures also dropped sharply on Wednesday and cattle feeders sold showlists at lower levels with live sales 2.00-3.00 lower from 78.00-80.00 and dressed 1.00-3.00 lower from 127.00-128.00. This marked only the second week since July 2006 that the Five Area Weighted Average Slaughter Steer Price fell below 80.00.

The snowstorm and interrupted slaughter schedules placed undo pressure on the struggling fed cattle market that was already reeling from sluggish beef demand, the dismal economy, and meatless Mondays. However, the winter's first storm always seems to have the heaviest impact as folks toughen-up later in the season and tend to shrug-off wintry weather.

The frigid temperatures take their toll on cattle performance, but those that are stout enough to withstand the initial blow also become accustomed to the colder weather and health conditions usually improve.

Despite the severity of this past week's storm, there were no reports of catastrophic death loss or cattle wandering from their lots. There is still one more full-week of feeder cattle marketing before the holiday break and there are a significant number of buyers and sellers that need to get together before the end of the year. This week's reported auction volume included 38% over 600 lbs and 42 heifers.