040212 National Feeder Cattle Weekly Report

February 20, 2004 (based on information issued by USDA) - Compared to the previous week, feeder steers and heifers sold steady to 3.00 higher with many areas reporting calves as much as 5.00 higher. Price advances were noted in all regions, including the major direct trade areas where feedlot buyers are struggling to fill empty pens with cattle that will not hedge.

Nationwide, feeder cattle auction receipts are running 22% less than last year. It’s logical that if the supply is low and the demand is high for feedlot replacements in mid-February, then the same should be true for fed cattle in early summer. Not so fast, if this was true then tracking cattle markets would be boring and feeding cattle would be relatively low risk.

Four months ago, cattle feeders were paying well over 100.00 for yearling steers and establishing never before seen breakeven levels. Those cattle are now posted on showlists that are dripping with red ink, despite a post-BSE market rebound and respectable fed cattle prices. The slaughter cattle market does not hinge on the price of feeders, rather the number of cattle that packers decide to slaughter and the consumer demand for the final product.

This week’s reported auction volume included 56% over 600 lbs and 43% heifers. Auction volume for the week: 270,500 this week; 195,000 the previous week; 249,600 the same week last year.


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