Feds climb $1-2

Markets
Aug 13, 2010
by WLJ

Fed cattle trade was mostly wrapped up last Wednesday at prices $1-2 higher on live cattle and $2-3 higher on a dressed basis. Prices in the southern Plains were in a range of $94-95 while dressed trade in the North occurred at mostly $150. Analysts said that improving boxed beef markets and a lack of marketready animals were the primary drivers for the price improvement.

Retailers are in the process of buying to meet Labor Day holiday demand, which is providing the pressure needed to boost the cutout. Last Thursday, the midday Choice boxed beef cutout improved by 90 cents to trade at $154.09 while Select added 19 cents to reach $146.74, although movement was light to moderate.

Vetterkind Cattle Brokerage analyst Troy Vetterkind said last week that the manageable inventory levels throughout the production chain are helping to support prices as demand picks up, particularly in the middle meats.

“Near term demand is good enough to support product values, especially in the rib and loin complexes,” Vetterkind said. “Chuck and round cuts were mostly steady yesterday (Aug. 11) with another uptick in ground beef values.”

He said he expected the trend toward steady to improving prices was likely to continue for at least another week as a result of the retail improvement. Other sectors also continue to improve, including the ground beef markets, which have been strong for the past year or more and continue to post higher prices. Last week, the 50 percent trim traded at $69.53, nearly steady with a year earlier. However, the 90 percent lean, used for ground and manufacturing beef, was trading at $164.52, a price which is more than $33 per cwt. higher than the same week last year. The effect of the increased demand for ground beef by consumers, coupled with a decrease in foreign imports and a declining U.S. dollar, has helped increase the cow beef cutout to $130.99, a level $28 higher than last year.

That increase has helped push cull cow prices to very

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