Cattle Quick Thoughts
The big news in the cattle industry this week was the announcement that China will allow imports of U.S. beef for the first time since 2003. Practically the same announcement was made in September of 2016 and there remains no timetable for when trade could actually begin. Being able to export beef to China could be a lucrative opportunity for U.S. cattlemen. China is the most populated country in the world and has a growing middle class. The consumption of beef is also steadily growing amongst Chinese consumers, though still small when compared to U.S. consumption per person. Beef consumption per person in China in 2015 was about 8 pounds per person compared to 55 pounds per person in the U.S. The most important thing to take away from this announcement is that there is still much work to do before any U.S. beef enters directly into China. Negotiations on trade regulations must take place and will decide the specifics of the beef that China will accept. For example, China lifted the ban on Canadian beef in 2010. The fine print showed that they would accept only frozen boneless beef from cattle under 30 months of age that had not been given any beta agonists. Only in 2016 did this get expanded to add frozen bone-in beef, though the age and no beta agonist requirements still hold. The U.S. now must engage in similar trade negotiations with China. Even gaining access to a small segment of the Chinese market would be a big win for U.S. cattlemen.
Average cash prices were higher for nearly all cattle this week. Cash traded fed cattle were up $6.41 to an average of $128.12 for live sales. Dressed steers were up $7.97 to an average of $205.34. Fed cattle trade volume was 95,568 head.
Mississippi feeder steers weighing 450-500 pounds were up $4.50 this week to average $155 while 750-800 pound steers were up $5 at $124.50. Average feeder prices in Oklahoma City for 500-550 pound steers were up $4.59 to $170.15 while OKC 750-800 pound steers were up $1.87 from last week to $137.25.
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Cattle futures prices were up significantly this week. April live cattle were up $5.45 to $125.45 while June live cattle were up $2.93 to $114.70. April feeder cattle were up $4.05 to $137.70 while May feeder futures were up $4.47 on the week to $138.28. Corn futures prices were up this week with May and July futures up 11 and 10 cents to $3.70 and $3.77, respectively.
Wholesale boxed beef prices were steady to slightly lower this week. Choice boxes averaged $209.94, down 4 cents from a week ago. Select boxes ended the week at an average of $198.62, down $1.38 from last week. The choice-select spread was $11.32, up $1.33 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.