US finished cattle backlog concerns trade and farmers

By Joanna Newman

NOT enough market-ready cattle are leaving US feedlots to go to the nations packing houses, and this is raising concerns among producers and traders.

The mild weather means cattle are quickly gaining weight as they are fattened up for slaughter, thereby increasing the supply of beef.

As reported last week, the average slaughter weight in October was up 19lbs/head (8.6kg) from a year ago at 1214 lbs (552kg). Recent feedlot sales figures suggest the trend is continuing.

Amid very thin trading, the Chicago December live cattle futures contract lost ground to close on Thursday (3 December) at 62.22¢/lb, down from 63.45¢/lb just before the Thanksgiving holiday.

The store cattle contract for January was more stable, settling at 71.12¢/lb almost unchanged from a week ago. Cash prices paid by packers managed to inch up however, from 60-61¢/lb last week to 61-62¢/lb currently.

The market did find some support from news that the US Department of Agriculture will purchase US$20 million-worth (£12m) of beef for its school lunch programmes. While this is a fairly small quantity against the size of the total market, it helped improve sentiment.