By Joanna Levin
ONCE again, US cattle prices were supported this week by better demand and signs that the backlog of market-ready cattle in feedlots is beginning to clear. Increased orders from packing houses and fewer cattle entering the feedlots are pushing up prices.
Sales during March were 6% higher than last years. The number of cattle entering the larger feedlots was 16% lower. As a result, there were 8.16 million head in the feedlots in March, down from a record 8.77m a year earlier.
At auctions around the country this week, slaughter cattle gained 1¢/ lb to 66¢/ lb, while 450lb steer calves averaged 99.3¢/ lb, up from 99.0¢/ lb last week. On the Chicago futures exchange, the May feeder cattle contract closed almost unchanged at 76.95¢/ lb on Monday 20 April, down 0.175c from 77.125¢/ lb a week ago.
The number of cattle being fattened is still the second highest on record, however. And any slowdown in the slaughter rate risks the feedlots becoming overcrowded again, and could trigger another downturn in prices.
Analysts warn that it could be late summer before the industry finally catches up with supply. Carcass weights are 27lbs heavier than last year and some commentators speculate that owners have been holding out for better prices.