Iowa Farmer Today
09-15-07
Steer carcasses at record weights
By Jeff DeYoung, Iowa Farmer Today
AMES -- Bringing heavier cattle into the feedlots should translate to heavier cattle
coming out.
John Lawrence, Iowa State University Extension livestock marketing
economist, said feedlots want heavier calves to avoid feeding costs.
That has translated into higher carcass weights.
“Steer carcass weights were at record levels a year ago before corn prices went
up with an average of 850 pounds,” he said during the recent ProBeef ’07
conference here.
“Now, they are back up to record levels again.”
He said the slaughter of beef and dairy cows is up 10 percent year-to-date, but
added profitability in the cow/calf and dairy sectors could be changing that
mindset.
“We have record high milk prices and grass in the Plains, so we could see a
reduction.
“However, we are also in a part of the world where some pasture could be
converted into corn ground, so there could be producers who will decide to get
out of the cow business.”
Fed cattle prices continue to approach record levels.
Lawrence said that has resulted in a subsequent increase in feeder cattle prices.
The Choice/Select gap has narrowed some as bargain-hunting consumers are
more than willing to buy a less expensive product, he noted.
Demand remains strong with competing meats, Lawrence said.
He added there is a perception retailers are not featuring beef enough in their
advertising specials.
“We really don’t see them featuring steaks, and that is a concern. The economy
has been resilient, but will the other shoe drop?”
He said exports are climbing, but at a slow rate.
Lawrence expects fed cattle prices to average $92 per hundredweight through
the end of the year with higher prices in 2008.
“That may trigger some growth, but it will be slow because of the competition for
land.”
The nation’s feedlots have excess capacity, Lawrence said, with some expansion
near ethanol plants.
“There’s going to be a knock-down, drag-out fight for feeder cattle.”
Tight packer capacity this fall, coupled with large hog supplies, could limit pork
demand.
“Weaker exports and cheaper competing meats will limit demand, and more hogs
at heavier weights will increase supply,” Lawrence said.
With December futures prices trending higher, he said live hogs should still bring
over $50/cwt., giving producers some price protection.