Cattle prices leap-frog higher

Cash fed cattle prices traded at $124 to $125 per cwt. last week, with most activity on Thursday. Those prices represent a $6 to $8 jump over the prior week across all regions, and about $14 higher than two weeks ago. Dressed prices were quoted at $191, or $10 per cwt. higher.

The rally has been fueled by sharply higher CME futures prices, and the revelation that USDA’s new camera-grading technology, referred to as the Gigabyte Ethernet or “Gig E,” would undergo revised programming at nine harvest facilities representing about 50% of fed beef production. The industry anticipates the changes could reduce marbling scores for a significant number of carcasses.

CME cattle futures also posted hefty gains. December Live Cattle ended the week $6.48 higher than the previous Friday at $127.30, and February closed $6 higher at $131.75.

Stocker and feeder cattle prices joined the party with steer and heifer calves selling $2 to $6 higher at auctions, and some markets reporting prices $9 higher. That’s despite significantly higher numbers of cattle offered at auctions this year. AMS reporters noted more than 400,000 cattle traded last week at auction and through direct trades, with 83% at auction. For the past three week, auction receipts averaged 316,000, compared to 289,000 for the previous three years.

Choice boxed beef closed Friday at $208.74 per cwt., $5.44 higher than the previous week, and $20 higher than a year ago. Select boxed beef closed at $193.08, up just 60 cents from the previous Friday, widening the Choice/Select spread to $15.66.

Source: Drovers