051236 Cattle Placements Up, Consumer Beef Demand Down

Cattle placements on feed during November were up 17.3% from a year earlier. The trade estimate was for the placements to be up 14.6 percent. The number of cattle on feed December 1, was up nearly 3.5% from 12 months earlier.

There were increases in placements of all weight feeder cattle. The number placed on feed during November weighing less than 600 pounds was up 11.9%, the number weighing 600-699 pounds was up 16.7%, the number weighing 700-799 pounds was up 28.8%, and the number weighing 800 pounds plus was up 16.7 percent.

This report indicates fed cattle marketings will be substantially above 2005 by spring or early summer.

Demand for beef at the consumer level for January - November was down 2.9% from 12 months earlier. However, for September - November of 2005 beef demand at the consumer level was down 4.7% from 12 months earlier.

The good news is that the demand for live fed cattle for January - November was up 0.1% from the same months in 2004. For September - November live fed cattle demand was up 2.4% from 12 months earlier.

With the tariff Canada has on corn imported from the United States the odds are high that we will get more feeder cattle from Canada. However, there were reports this week that the cattle and hog producers in Canada were trying to get a rebate on the beef, pork and live animals exported to offset the corn tariff.

On the surface this sounds like an export subsidy. Will that be legal under the trade agreements Canada has with other countries? Apparently so under certain conditions.

Based on the information we have the price of corn in Canada was $0.60- 0.70 U.S. per bushel higher than U.S. corn, and probably will gain more in coming weeks.

Oklahoma City feeder prices are not available this week due to the Christmas holiday on Monday. However, feeder prices are continuing to hold very strong.

Beef product prices were some higher at mid week but came under pressure in late week and choice beef Friday morning were down $0.86 per cwt at $156.86 per cwt compared to a week earlier. Select beef prices at $141.37 per cwt Friday morning were down $4.50 per cwt from 7 days earlier.

Fed cattle trade was very light this week but what did trade was at some lower prices. The five market weighted average for fed cattle at $93.34 per cwt for the week through Thursday was down $2.39 per cwt. The weighted average carcass price for the five market area at $150.25 per cwt for the week through Thursday was down $4.37 per cwt from 7 days earlier.

The trade was too light for a good market test in Midwest and High Plains direct trade.

Slaughter this week under Federal Inspection was estimated at 527 thousand head down 2.00% from a year earlier.

Source: Grimes & Plain, University of Missouri – Columbia

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