Weekly Livestock Comments for April 17, 2020
By : Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee
FED CATTLE: Fed cattle traded steady com-pared to last week on a live basis. Prices on a live basis were mainly $105 while dressed prices were not well established.
The 5-area weighted average prices thru Thursday were $96.77 live, down $8.23 compared to last week and $154.33 dressed, down $13.67 from a week ago. A year ago, prices were $128.37 live and $207.77 dressed.
Cash trade continues to be light this week as many processing facilities have slowed production in several different fashions. The reduction in production means there is not as much need for cash cattle purchases to fill in production holes throughout the week as many of these facilities are trying to make sure they get all of their contracted cattle processed with a limited labor resource in many instances. What few cattle trade in the cash market will mean lower prices week-over-week which will play into lower formula prices as well. The dynamics of the market are extremely interesting to say the least, and probably considered frustrating to most cattle producers who feel as if they have been taken ad-vantage of. This too shall end.
BEEF CUTOUT: At midday Friday, the Choice cutout was $238.07 up $2.20 from Thursday and up $14.42 from last week. The Select cutout was $229.60 up $3.62 from Thursday and up $21.17 from a week ago. The Choice Select spread was $8.47 compared to $15.22 a week ago.
Most of the talk on the meat side of the business has been the shuttering of slaughter facilities and the reduced production at other facilities for both beef and pork. From a consumer perspective, there is concern about meat availability at the local grocery store while slaughter facilities are trying to manage around employee health and the agricultural producers who are supplying live animals to the facility. When slaughter levels are reduced then animals will start backing up in the feedlot or finishing barn.
This action means that cattle feeders and hog finishers have to decide what to do with these animals. Most cattle feeders will feed cattle to heavier weights until they can physically move these animals to the slaughter facility. This means pen space is not opening up which backs up feeder cattle and calves. From the hog side, hogs have to move off the finishing floor to make way for the next group or an alternative destination has to be found for the next group of hogs. There are a lot of tough decisions ahead and hopefully American ingenuity can overcome some of the barriers.