Ron Plain Cattle Outlook: The Latest Jobs Report is Encouraging.

Dec 05, 2014
By Ron Plain

Cattle Outlook

Ron Plain and Scott Brown

University of Missouri

December 5, 2014

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The latest jobs report is encouraging. The U.S. economy added 321,000 jobs in November. More people working is good news for meat demand. The unemployment rate held steady at 5.8%.

Gasoline prices have fallen rapidly in recent weeks. That should free-up consumer dollars to spend on food. It's not been a great year for beef packers, but the numbers indicate they are going broke more slowly than during the last three years.

Fed cattle prices were lower this week on modest sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $166.61/cwt, down $5.35 from last week's average, but up $34.72 from a year ago. The 5 area average dressed price for steers was $263.97/cwt, down $2.44 for the week, but up $54.87 from the same week last year.

Boxed beef prices declined this week. This morning the boxed beef cutout value for choice carcasses was $253.87/cwt, down $3.28 from the previous Friday, but up $51.85 from a year ago. The select carcass cutout is $237.78/cwt, down $8.11 from last week, but up $50.10 from a year ago.

The choice-select price spread this week is $16.10/cwt. That is the largest spread since early November 2013. The wide spread reflects, in part, strong consumer demand for quality beef.

This week's cattle slaughter totaled 562,000 head, up 13.3% from Thanksgiving week, but down 10.7% from the same week last year. This was the 40th consecutive week with cattle slaughter below the year-ago level.

Slaughter weights continue to be heavy. The average steer dressed weight for the week ending on November 22 was 901 pounds, down 5 pounds from the week before, but up 22 pounds compared to the same week last year.

Year-to-date cattle slaughter is down 7.4%, but year-to-date beef production is down only 6.0% because of heavier weights.

Feeder cattle prices at this week's Oklahoma City auction were mixed compared to the week before. This week's prices for medium and large frame #1 steers by weight were: 400-450# $363-$393, 450-500# $313-$329.50, 500-550# $281-$316, 550-600# $268-$290, 600-650# $254-$288, 650-700# $245-$265, 700-750# $235-$252.50, 750-800# $225-$237.75, 800-900# $215-$233.25, and 900-1000# $210-$222/cwt.

The December live cattle futures contract settled at $164.45, down $4.42 for the week. February cattle settled at $164.87/cwt, down $4.35 from the previous Friday. The April contract closed at $164.30/cwt with a loss of $4.70 for the week.

The January feeder cattle contract ended the week at $234.87/cwt, down $3.80 for the week. March feeders closed at $231.22/cwt, up $1.02 compared to last Friday. April feeder cattle ended the week 15 cents higher at $230.92/cwt.

Sorce: AgEBB

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Video: US Soy: Pig growth is impaired by soybean meal displacement in the diet

Eric van Heugten, PhD, professor and swine extension specialist at North Carolina State University, recently spoke at the Iowa Swine Day Pre-Conference Symposium, titled Soybean Meal 360°: Expanding our horizons through discoveries and field-proven feeding strategies for improving pork production. The event was sponsored by Iowa State University and U.S. Soy.

Soybean meal offers pig producers a high-value proposition. It’s a high-quality protein source, providing essential and non-essential amino acids to the pig that are highly digestible and palatable. Studies now show that soybean meal provides higher net energy than current National Research Council (NRC) requirements. Plus, soybean meal offers health benefits such as isoflavones and antioxidants as well as benefits with respiratory diseases such as porcine reproductive and respiratory syndrome (PRRS).

One of several ingredients that compete with the inclusion of soybean meal in pig diets is dried distillers grains with solubles (DDGS).

“With DDGS, we typically see more variable responses because of the quality differences depending on which plant it comes from,” said Dr. van Heugten. “At very high levels, we often see a reduction in performance especially with feed intake which can have negative consequences on pig performance, especially in the summer months when feed intake is already low and gaining weight is at a premium to get them to market.”

Over the last few decades, the industry has also seen the increased inclusion of crystalline amino acids in pig diets.

“We started with lysine at about 3 lbs. per ton in the diet, and then we added methionine and threonine to go to 6 to 8 lbs. per ton,” he said. “Now we have tryptophan, isoleucine and valine and can go to 12 to 15 lbs. per ton. All of these, when price competitive, are formulated into the diet and are displacing soybean meal which also removes the potential health benefits that soybean meal provides.”