A Newsletter for Extension Staff
Livestock Marketing Information Center
State Extension Services in Cooperation with the USDA
Market Indicators . . . November 6, 2009
| Production |
Prices |
| Week Ending 11/7/2009 |
Last |
Year Ago |
Weekly Weighted Average |
Last |
Week Ago |
Year Ago |
FI Cattle Slaughter (Thou Hd) |
629 |
624 |
Live Steer |
86.44 |
86.90 |
93.02 |
FI Hog Slaughter (Thou Hd) |
2302 |
2305 |
Dressed Steer |
134.24 |
133.85 |
144.29 |
| FI Sheep Slaughter (Thou Hd) |
50 |
47 |
Choice Beef Cutout |
141.29 |
141.15 |
146.87 |
| Live Y. Chick Sl. (Mil Hd) |
161.1 |
162.1 |
USDA Hide/Offal |
8.61 |
8.37 |
9.60 |
| |
|
|
GA Auction Fdr. Str. (6-7 Cwt.) |
83.04 |
80.38 |
82.59 |
Slaughter Cattle Live Weight |
1318 |
1302 |
|
|
|
|
| Slaughter Hog Live Weight |
272 |
271 |
Iowa/S. Minn. Base Hog |
53.80 |
52.02 |
52.65 |
| Slaughter Lamb/Sheep Live Wt. |
133 |
134 |
Natl. Net Hog Carcass |
56.14 |
55.31 |
59.63 |
| |
|
|
Feeder Pigs (40-50 Lbs) ($/Head) |
38.33 |
36.41 |
41.68 |
| Beef Production (Mil Pounds) |
499.5 |
487.2 |
Pork Cutout |
59.08 |
57.16 |
57.69 |
| Pork Production (Mil Pounds) |
466.0 |
465.3 |
|
|
|
|
| Lamb, Mutton Prod. (Mil Lbs.) |
3.3 |
3.2 |
Lamb Cutout ($/Cwt) |
207.89 |
207.69 |
233.95 |
|
|
|
|
|
|
|
| Previous 6 Wk. Moving Avg. |
|
|
Corn, Omaha ($/Bu) |
3.44 |
3.48 |
3.55 |
| Total Beef (Mil Lbs) |
507.2 |
500.7 |
Wheat, Portland ($/Bu) |
4.82 |
4.75 |
5.05 |
| Total Pork (Mil Lbs) |
466.8 |
470.7 |
Wheat, Kansas City ($/Bu) |
4.40 |
4.37 |
5.29 |
| Total Lamb, Mutton (Mil Lbs) |
3.1 |
3.1 |
Soybeans, S. Iowa ($/Bu) |
9.19 |
NQ |
8.78 |
Trends . . . CATTLE FEEDING RETURNS REMAIN IN THE RED
Red ink for cattle feeders has continued in 2009. On the heels of the worst cattle feeding returns ever in 2008 (LMIC began monthly estimates in the early 1970’s), projected annual cash returns this year will likely be the second poorest ever. After the first quarter, the average per head loss on steers did moderate and continued to do so through the early summer. However, losses have increased the last few months with the estimated steer returns in the red by about $69 per steer for the third quarter of 2009, still much smaller than the well over $100 plus per steer losses posted earlier in the year. Estimated losses for average performing cattle in feedlots are forecast to continue for the balance of the year.
LMIC estimates of average feedlot returns are based on feeding out a 750-pound steer placed in a Southern Plains commercial feedlot, including all production costs incurred by the feeding operation. In January, the estimated feeding loss was nearly $230 per steer; nearly matching the record loss posted last December. By April, feedlot returns had improved to about a loss of $28 per steer, but the decline was short lived as feeding losses further increased and were at a negative $50 per steer in October. For the January through October period, feeders lost an average $89 per steer versus a loss of $110 per steer for the respective period last year.
Estimated breakeven sales prices for 750-pound steers placed into a Southern Plains feedlot to be marketed during the balance of 2009 will remain in the low $90’s per cwt. However, estimated breakevens have declined in recent weeks. Steers placed in October that will reach market weight in February have estimated breakevens about $87 per cwt., based on recent feedstuff costs in the Southern Plains.
HOG RETURNS
Estimates of monthly farrow-to-finish hog returns are provided by Iowa State University (Dr. John Lawrence in the Department of Economics). Those data reveal that production costs have declined in 2009 compared to 2008, as feed prices have softened with the average live slaughter hog breakeven sales price in the low $50s per cwt. this fall. However, lower hog prices this year have resulted in continued losses each month this year. Estimated returns for slaughter barrow and gilts sold in September were negative by $37.68 per head, the second largest monthly loss yet this year.
For the first three quarters of 2009, hog producers on average lost about $17 to $18 per head, about a dollar more compared to the respective period in 2008. Hog producers have posted losses each month since February 2008, with the largest monthly loss for 2009 reported in August at nearly $43 per head. Production costs for slaughter hogs marketed in September were the lowest reported since the summer of 2007. Looking ahead, the red ink could remain rather large for the balance of this year depending on how high feed prices move and how well slaughter hog prices hold-up in the fourth quarter. That trend will likely continue into 2010.
U.S. and Canadian hog producers have continued to reduce the breeding herd in response to red ink. As of September 1st, the U.S. breeding herd was down 3 percent, while the Canadian breeding herd was down 5 percent from last year as of October 1st. Thus, the combined North American sow herd is about 3 percent lower than last year at this time. Still, U.S. sow slaughter so far this year has not been as large as expected and will need to increase to compensate for continued production efficiency gains.
EWE SLAUGHTER UPDATE
Since mid-summer of this year, FI mature ewe slaughter has increased dramatically compared to levels in recent years. This substantial increase in ewe slaughter is the result of the following key factors: 1) year-to-year declines in the number of live cull ewe exports to Mexico; 2) prolonged and severe drought conditions this past summer in Texas and California; and 3) increased predator issues in Texas and the Western states.
As of weekending October 24th, year-to-date FI mature ewe slaughter totaled 118,543 head compared to 98,700 head in 2008, an increase of 20 percent or about 20 thousand head. For the respective period, ewe slaughter was 12 percent higher than the 2003-2007 average. So far this year, the largest weekly slaughter volumes have been posted in October, with weekly volumes in the 4.6 thousand head to 5.7 thousand head range. The last time U.S. weekly mature ewe slaughter numbers were near that range was during the mid 1990’s, when the flock was much larger.
In 2008, the Mexican government ruled that all imported ewes must be slaughtered in FI slaughter facilities in Mexico. Since there are only a few FI slaughter facilities in Mexico, the demand for imported ewes from the U.S. has declined as reflected in the weekly live export data reported by USDA-AMS. As of weekending October 24th, year-to-date exports of cull ewes to Mexico at 67,405 head are down about 21.3 thousand head or 24 percent from 2008 and 33 percent less than in 2007.
Based on the data, some of the increase in mature ewe slaughter this year is being offset by declines in mature ewe exports to Mexico. However, it does appear that some ewe liquidation is occurring in the U.S. sheep flock this year. Nevertheless, any conclusions regarding the year-to-year increase in ewe slaughter this year should be made rather cautiously.
