Slow recovery for US cattle

By Joanna Newman

US cattle prices appeared to recover this week after spending months under pressure from gyrations in the pig market.

After being dragged down nearly 15% during the fourth quarter of 1998 by a collapse in pig values, cattle prices recouped at least 5%.

The Chicago February live cattle futures contract closed on Wednesday (13 January) at 62.15¢/lb (82.5p/kg), up from 59.6¢ at the start of the month.

Feeder cattle contracts, for lighter store cattle entering the feedlots, followed a similar path.

The March feeder contract climbed from around 69.7¢/lb at the start of January to 72.32¢/lb on Wednesday.

In the cash market, packers are now willing to pay more for slaughter animals, with bids up at 62¢/lb from 58¢ at the start of the year.

Higher beef prices are driving the trend: the light-weight choice-grade beef cutout is over 101¢/lb, compared with below 100¢ last week.

Meanwhile, the traditional inverse relationship between feed costs and cattle prices reared its head again.

After a parallel decline in both cattle and maize prices, livestock returns have rallied, while grain values posted losses.