Cattle Market Notes Week Ending March 24, 2017

Cattle Quick Thoughts

The ongoing scandal in the Brazilian meatpacking industry is impacting the flow of beef around the world. Some meatpacking companies in Brazil are under investigation for allegedly bribing food sanitation inspectors according to a recent report by the Wall Street Journal. This is a big deal because Brazil is the world’s largest exporter of beef. China and other key countries have suspended or reduced the amount of beef imported from Brazil as the investigation unfolds. While the U.S. cannot export directly to China, China will likely be forced increase imports from Australia, Argentina, and Canada until the situation in Brazil clears. The U.S. likely indirectly benefits for this as some of our trading partners also import from these countries. Increased competition will likely lead these trading partners to turn to more U.S. beef. It remains unclear how long this will last as China could resume trade with Brazil at any time and the indirect benefits to the U.S. could be short-lived. How this unfolds could have significant impacts on U.S. beef exports. The U.S. imports very little beef from Brazil and the USDA Food Safety Inspection Service (FSIS) has reported that “none of the slaughter or processing facilities implicated in the Brazilian scandal have shipped meat products to the United States.” FSIS has also instituted a 100% re-inspection rule on all beef from Brazil.

Cash Cattle:

Cash traded fed cattle were up slightly to an average of $128.95 for live sales, 20 cents higher than last week. Dressed steers were up $4.94 to an average of $212.97. Fed cattle trade volume was little over 26,000 head.

Mississippi feeder steers weighing 450-500 pounds were $4 lower this week to $153.50 while 750-800 pound steers were up $6 to $122.50. Average feeder prices in Oklahoma City for 500-550 pound steers were up $13.06 to $165.74 while OKC 750-800 pound steers were up $3.16 over last week to $133.11.

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Futures:

Cattle futures prices surged the week. April live cattle were up $3.08 over last week to $122.08 while June live cattle were up $3.35 to $112.73. March feeder cattle were up $2.30 to $133.50 while April feeder futures increased $4 on the week to $135.50. Corn futures prices were down this week with May and July futures each down 12 cents to $3.55 and $3.63, respectively.

Beef:                                                                                          

Wholesale boxed beef prices were up again this week. Choice boxes averaged $223.12, up $1.56 from a week ago. Select boxes ended the week at an average of $215.30, an increase of $1.76 from last week. The choice-select spread decreased slightly to $8.02, down 20 cents from last week.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel unless stated otherwise.

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