060139 Cattle Inventory Higher; Beef Demand Down

There was very little market action to the ban on beef shipments to Japan. It is still uncertain how long the ban will last.

The Canadian Food Inspection Agency announced on Monday that a cow approximately 6 years old, raised in Alberta was confirmed to have bovine spongiform encephalopathy (BSE). This is the fourth cow found in Canada to have BSE.

Finding this fourth case of BSE in Canada is not expected to change current regulations concerning trade with the U.S. All beef and cattle imported from Canada by the U.S. is from animals 30 months of age or less.

The January 1 cattle on feed report showed the number on feed up nearly 4.5% from 12 months earlier. The number of cattle placed on feed during December was up 2.7% and fed cattle marketings during December were down nearly 3.5% from a year earlier.

These numbers point to larger marketing this coming spring than in 2005.

Practically all of the increased placement of cattle on feed during December was in cattle weighing less than 600#. The number placed on feed weighing less than 600# was up 23.7%, the number weighing 600- 699# was down 0.7%, the number placed on feed weighing 700-799# was down 12.1% and the number placed on feed weighing over 800# was up 0.9% from 12 months earlier.

Remember, lighter weight cattle will need to be fed longer. Therefore, fed markets will be up less than the number on feed would suggest.

Based on preliminary data the demand for beef in 2005 was down 3% from 2004.

However, the demand for live fed cattle for 2005 was up a little less than 1% from 2004. The bad news is that the demand for beef in the fourth quarter of 2005 was up 4.3% from the same period 12 months earlier. The good news is that demand for live cattle was up 3.2% in the 4th quarter from 2004.

Predicting what will happen to beef demand is nearly impossible, but we are hoping demand for beef will stabilize in 2006.

Feeder steers and heifers at Oklahoma City this week were steady to $1 per cwt higher, and steer and heifer calves were steady with 7 days earlier. Price ranges for medium and large frame No. 1 steers by weight group were: 400-500# $139-163.50 per cwt, 500-600# $116.50-148.50 per cwt, 600-700# calves $112-123.50, 700-800# calves $108-112.50 per cwt, 500-600# yearlings $121.50-147, 600-700# yearlings $116.50-126.75 per cwt, 700-800# yearlings $108-118 per cwt and 800-950# $102.75-111.50 per cwt.

Negotiated trade in fed cattle was slow to start this week with only 6419 head changing ownership through Thursday. Live fed cattle prices through Thursday for the five market area averaged $94.12 down $0.38 from a week earlier. The average weighted carcass price for the five market area at $149.45 per cwt was down $1.98 per cwt from 7 days earlier.

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