Ron Plain’s cattle report
The U.S. Commerce Department says the real gross domestic product grew only 1.8% in the first quarter of 2011, down from 3.1% growth in the fourth quarter of 2010 and the slowest growth since the second quarter of 2010. During the 7 quarters since the official end of the recession, real GDP growth has averaged only 2.8%. It is generally felt real GDP growth needs to be above 2.5% to cause the unemployment rate to fall.
The average price of gasoline is now $3.93 per gallon, up $1.03 from a year ago and $1.83 higher than two years ago. Historically, high gasoline prices have been a drag on meat demand.
The broiler industry appears to have been too optimistic about demand growth. USDA is forecasting 2011 broiler production will be up 1.4%. Pilgrim’s Pride reported a net loss of $120.8 million for the first quarter of 2011. The March retail price of boneless choice sirloin was up 14.9% and boneless pork chops were up 14.6%, but retail boneless chicken breast prices were down 1.3% compared to March 2010.
Both cattle and beef prices were lower this week. On Friday morning the choice boxed beef carcass cutout value was $182.88/cwt, down $3.40 from last week. The select carcass cutout was down $2.36 from the previous Friday to $177.21 per hundred pounds of carcass weight.
The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $116.81/cwt, down $2.49 from last week. Steers sold on a dressed weight basis this week averaged $186.93/cwt, $4.44 lower than the week before.
This week’s cattle slaughter totaled 615,000 head, down 5.2% from the week before and down 7.1% compared to the same week last year.
Cash bids for feeder cattle around the country this week were mostly steady to $5 lower with some heavier feeders higher than last week. Oklahoma City prices were steady to $3 lower on stocker cattle and steady to $3 higher on feeder cattle than the previous week with price ranges for medium and large frame #1 steers: 400-450# $157-$162, 450-500# $154-$159, 500-550# $146-$151.50, 550-600# $147-$151.50, 600-650# $140.75-$148.25, 650-700# $137-$143.50, 700-750# $135.50-$140.50, 750-800# $129.25-$137, 800-900# $122-$133.25 and 900-1000# $117-$123/cwt.
The June fed cattle futures contract ended the week at $113.35/cwt, down $1.88 from last week’s close. The August contract closed out the week at $115.70/cwt. October settled at $120.72 and December ended the week at $122.90/cwt.
USDA’s latest crop progress report estimates 9% of the corn acres was planted by April 24, down from 46% planted on that date last year and a 5-year average of 23% planted.
The May corn futures contract gained 17 cents this week to close at $7.54/bushel. December corn settled at $6.68/bu.