redrobin
Well-known member
SEPTEMBER 26, 2011
MARKET REPORT AND ANALYSIS
Number of Cattle on Feed, Placements, Marketings, and Other Disappearance on
1,000+ Capacity Feedlots - United States: September 1, 2010 and 2011
--------------------------------------------------------------------------------
: Number : Percent of
Item :---------------------------:
: 2010 : 2011 revious year
--------------------------------------------------------------------------------
: ---- 1,000 head ---- percent
:
On feed August 1 ....................: 9,880 10,589 107
Placed on feed during August ........: 2,271 2,252 99
Fed cattle marketed during August ...: 1,923 2,048 107
Other disappearance during August ...: 47 72 153
On feed September 1 .................: 10,181 10,721 105
Friday's COF report was bullish and reflected much lower placements for August than most forecasters estimated. USDA estimates are worrisome and conflict with private sources that are tracking placements on a more accurate level.
The expectations for higher prices from last week will be carried forward to this week. A favorable cattle on feed report coupled with an crashed equity and commodity markets were showing signs early Monday of an attempt at a recovery. Beginning asking prices will be at $119.
Boxed prices were mixed to lower. Choice cuts held their own at $183 while select cuts were one lower at $169. The choice/select spread was the widest in many months at $14. Slaughter numbers are creeping higher. The mix also will be changing as fewer cows will be available requiring more fed cattle in the slaughter mix.
The fall run of feeder cattle in the southern plains is nearing completion almost 30-60 later than usual. The light weight replacements have been forced into feedyards but the marketings will be staggered next year. The questionable placement for August might be revised upward in the future by USDA. A 750# steer was selling for $133 in the southern plains.
Nominal rains across the southwest remind ranchers that one rain does not break a drought. The moisture profile for the soil is non existent and one rain begins the slow process of awakening the dormant grass plants but this does not constitute a recovery. For the plants to revive, it will require returns to more normalized rainfall at regular intervals.
Corn prices are creeping higher following last week rout. Signs are present in the political arena for various attacks on the current ethanol subsidies and mandates. It would not be a good time to own a ethanol plant. The basis in Guymon Oklahoma is moving lower to $.70 over December contract. Corn is now pricing into most rations at $13.00 cwt..
POLITICS
A recent reader sent in a comment regarding the weekly editorial. The reader suggested THE CATTLE REPORT limit its content to comments on the market and refrain from delving off into politics. We appreciate the comments we receive and not always do they agree with the opinions expressed on these pages. Dissent and criticism are good and we certainly have no patent on the correct way of thinking or the proper course of action.
Uncoupling market comments from politics isn't going to happen in this industry. Our business in intertwined with politics and governmental action. We depend on government to:
Survey the numbers of cattle. This task requires compiling the number of cattle in the national herd as well as placements into feedyards, marketings out of feedyards, and cattle on feed. We continue to question the reliability of the published numbers and the methodology to arrive at the information used in the reports. Placements this past month were much lower than those gathered by private sources.
Food safety and meat inspection. Government inspectors make important calls on beef such as quality grade and yield grade. They also regulate animal health issues like condemnation, antibiotic use, vaccinations and much more. USDA and FDA often compete and conflict over territorial issues.
Environmental regulation. The government has a role in regulating our soil, water, land use and air.
Markets. The government not only tells us what cattle prices are but how we can buy and sell cattle and who can buy and sell cattle. They regulate how payments for livestock are made and the priority of claims of money.
Trade policy. Beef processors sell beef abroad based on a framework provided or not provided by the government.
These are only a few of the major areas in which government interfaces with our business. The various governmental agencies involved with the industry do not operate in a vacuum. They take direction from the Executive Branch or the President. Anyone who is unable to tell a difference in governmental policies and regulatory interpretation of the beef industry under President Obama vs. President Bush is not playing with a full deck.
This editorial writer is willing to admit to a huge mistake in 2008. I voted for Obama. He seems bright, articulate, hopeful and it was time for a change. It has been a change but the change has been a disaster for American business. President Obama simply doesn't understand the nature of business or markets. Whether it is regulating dust or asking his bureaucrats to assure that all cattle owners are selling cattle at the same price, he gets it wrong when it comes to business.
His policies will assure no young people enter the beef industry. His boneheaded ethanol policy assures those that are already in the business, cannot profit. The next election will be critical for the beef industry and a change is in order.
Apologies to the writer of the comment asking us to refrain from political comment.
MARKET REPORT AND ANALYSIS
Number of Cattle on Feed, Placements, Marketings, and Other Disappearance on
1,000+ Capacity Feedlots - United States: September 1, 2010 and 2011
--------------------------------------------------------------------------------
: Number : Percent of
Item :---------------------------:
: 2010 : 2011 revious year
--------------------------------------------------------------------------------
: ---- 1,000 head ---- percent
:
On feed August 1 ....................: 9,880 10,589 107
Placed on feed during August ........: 2,271 2,252 99
Fed cattle marketed during August ...: 1,923 2,048 107
Other disappearance during August ...: 47 72 153
On feed September 1 .................: 10,181 10,721 105
Friday's COF report was bullish and reflected much lower placements for August than most forecasters estimated. USDA estimates are worrisome and conflict with private sources that are tracking placements on a more accurate level.
The expectations for higher prices from last week will be carried forward to this week. A favorable cattle on feed report coupled with an crashed equity and commodity markets were showing signs early Monday of an attempt at a recovery. Beginning asking prices will be at $119.
Boxed prices were mixed to lower. Choice cuts held their own at $183 while select cuts were one lower at $169. The choice/select spread was the widest in many months at $14. Slaughter numbers are creeping higher. The mix also will be changing as fewer cows will be available requiring more fed cattle in the slaughter mix.
The fall run of feeder cattle in the southern plains is nearing completion almost 30-60 later than usual. The light weight replacements have been forced into feedyards but the marketings will be staggered next year. The questionable placement for August might be revised upward in the future by USDA. A 750# steer was selling for $133 in the southern plains.
Nominal rains across the southwest remind ranchers that one rain does not break a drought. The moisture profile for the soil is non existent and one rain begins the slow process of awakening the dormant grass plants but this does not constitute a recovery. For the plants to revive, it will require returns to more normalized rainfall at regular intervals.
Corn prices are creeping higher following last week rout. Signs are present in the political arena for various attacks on the current ethanol subsidies and mandates. It would not be a good time to own a ethanol plant. The basis in Guymon Oklahoma is moving lower to $.70 over December contract. Corn is now pricing into most rations at $13.00 cwt..
POLITICS
A recent reader sent in a comment regarding the weekly editorial. The reader suggested THE CATTLE REPORT limit its content to comments on the market and refrain from delving off into politics. We appreciate the comments we receive and not always do they agree with the opinions expressed on these pages. Dissent and criticism are good and we certainly have no patent on the correct way of thinking or the proper course of action.
Uncoupling market comments from politics isn't going to happen in this industry. Our business in intertwined with politics and governmental action. We depend on government to:
Survey the numbers of cattle. This task requires compiling the number of cattle in the national herd as well as placements into feedyards, marketings out of feedyards, and cattle on feed. We continue to question the reliability of the published numbers and the methodology to arrive at the information used in the reports. Placements this past month were much lower than those gathered by private sources.
Food safety and meat inspection. Government inspectors make important calls on beef such as quality grade and yield grade. They also regulate animal health issues like condemnation, antibiotic use, vaccinations and much more. USDA and FDA often compete and conflict over territorial issues.
Environmental regulation. The government has a role in regulating our soil, water, land use and air.
Markets. The government not only tells us what cattle prices are but how we can buy and sell cattle and who can buy and sell cattle. They regulate how payments for livestock are made and the priority of claims of money.
Trade policy. Beef processors sell beef abroad based on a framework provided or not provided by the government.
These are only a few of the major areas in which government interfaces with our business. The various governmental agencies involved with the industry do not operate in a vacuum. They take direction from the Executive Branch or the President. Anyone who is unable to tell a difference in governmental policies and regulatory interpretation of the beef industry under President Obama vs. President Bush is not playing with a full deck.
This editorial writer is willing to admit to a huge mistake in 2008. I voted for Obama. He seems bright, articulate, hopeful and it was time for a change. It has been a change but the change has been a disaster for American business. President Obama simply doesn't understand the nature of business or markets. Whether it is regulating dust or asking his bureaucrats to assure that all cattle owners are selling cattle at the same price, he gets it wrong when it comes to business.
His policies will assure no young people enter the beef industry. His boneheaded ethanol policy assures those that are already in the business, cannot profit. The next election will be critical for the beef industry and a change is in order.
Apologies to the writer of the comment asking us to refrain from political comment.