Sooner or later, Friday seems to be the day we trade cattle. Bids will be initially renewed around $109 to $112 in the South and $175 in the North. Look for some movement toward higher asking prices later Friday afternoon. Live and feeder futures are likely to open on a mixed basis with significant trade volume in the country waiting somewhere in the wings.
Hog buyers are expected to open the cash trade with bids steady to $1 lower. Processing has been tightening this week as product value softens at a faster rate than the late market. This is the lowest margin packers have seen since August, though it is still in the double digits. Packers are likely going to pressure hog prices in order to bolster margins in the descending cutout environment. Saturday's kill is expected to total around 278,000 head. Lean futures are expected to start with uneven price action with 2019 better supported than nearbys.
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The beef carcass value continued to appreciate on Thursday with box movement described as "fairly good." Late-week packer spending in the country seems more and more justified.
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The composite beef blended cutout has dropped toward $209. This is down $6 from the recent high on Nov. 6. Prices across the major primals were steady to weak. Further declines on cutout values are expected into early December.
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Required to buy the last full week of November slaughter needs next week, cattle buyers may feel more nervous exiting Saturday as short bought as they have been over the last two to three weeks.
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There is usually an increase in cattle slaughter in the full production week before Thanksgiving, but there are some expectations that this week's total may not be much more than last week's 640,000 head.
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American consumers picked up their spending in October, a sign fourth-quarter outlays began on a strong footing amid a robust labor market and high consumer confidence.
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Wholesale pork prices remained sticky Thursday as buyers sorted through record-size offerings. Demand particularly struggled relative to picnics, butts and hams.
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Pork packers may try to push a bit harder Friday, attempting to get ahead of next week's reduced holiday harvest level, making sure product is available.
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The pork cutout moved successively lower this week on declining belly and loin prices. While the price risk in the bellies is never over, a weakening belly over the next few weeks will allow the traditional price decline on the cutout to progress. Weekly declines on the cutout could be minor, maybe less than seasonal, but the upward price risk continues to fade.
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CATTLE:(Oklahoma Farm Report) -- When you break down the numbers of cattle being processed or slaughtered here in 2018, it tells an interesting story - so says Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel. He explained the breakdown of current slaughter picture with Radio Oklahoma Ag Network Farm Director Ron Hays.
"There's a very different story here. We can look at overall cattle slaughter and see it is up about 2.7 percent for the year to date. And, that's about what it will stay on a year-over-year basis as we finish out the year," Peel said. "But, when you look at the different classes you get very different stories. Steer slaughter has been on of the harder things to get a handle on this year."
According to Peel's analysis as described in his article in this week's Cow/Calf Corner newsletter, "steer slaughter continues to run below year ago levels so far this year. This despite the fact that the quarterly feedlot inventories have shown more steers on feed in 2018 compared to last year. For the year to date, steer slaughter is about one percent below last year but in the last four weeks has averaged very close to year ago levels. Steer slaughter has averaged 51.6 percent of total cattle slaughter so far this year, down from 52.9 percent of total cattle slaughter in 2017. As heifer and cow slaughter return to normal levels, steer slaughter will move closer to the long-term average of 50.6 percent of total slaughter.
"Heifer slaughter so far this year is averaging about seven percent above year ago levels with smaller year over year increases in recent weeks pulling the year to date total down to a smaller increase," he continues. "In the last four weeks, heifer slaughter has averaged just 1.5 percent over year earlier levels. Heifer slaughter thus far in 2018 has averaged 27.8 percent of total cattle slaughter, up from 27.2 percent in 2017. As heifer retention continues to slow, heifer slaughter will approach the long-term average just under 30 percent of total cattle slaughter.
"Total cow slaughter is up 7.3 percent year to date with beef cow slaughter up 10.5 percent year over year as beef cow culling returns to long term average levels. Dairy cow slaughter has moved higher as months of poor dairy economics have pushed the dairy sector to reduce cow numbers somewhat," Peel concluded. "Dairy cow slaughter is currently up 4.3 percent year over year for the year to date. Cow slaughter is averaging 18.9 percent of total cattle slaughter so far in 2018 compared to a long-term average of 17.7 percent of total slaughter. Cow carcass weights are averaging nearly five pounds heavier year over year with more dairy cows adding to cow carcass weights."
"You put it all together and we're going to see an increase in slaughter," he said, "but sort of different things happening across the board in the different sectors."
Based on the data available, it is Peel's impression that these numbers indicate that the US beef cow herd has probably expanded slightly for the year and expects the 2019 reports to show an increase of as much as a half a percent perhaps. However, he says they also strongly indicate that expansion has slowed rapidly and believes that 2019 will mark the peak in overall herd expansion.
HOGS: (American Farm Bureau Federation) -- The American Farm Bureau Federation's 33rd annual survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year's feast for 10 is $48.90, or less than $5.00 per person. This is a 22-cent decrease from last year's average of $49.12.
"Since 2015, the average cost of Thanksgiving dinner has declined steadily and is now at the lowest level since 2010," said AFBF Chief Economist Dr. John Newton.
The featured food on most Thanksgiving tables -- the turkey -- cost slightly less than last year, coming in at $21.71 for a 16-pound bird. That's roughly $1.36 per pound, down 3 percent from last year. The survey results show that retail turkey prices are the lowest since 2014.
"Thanks to an ample supply, turkey remains affordable for consumers, which helps keep the overall cost of the dinner reasonably priced as well," Newton said. The shopping list for Farm Bureau's informal survey includes turkey, stuffing, sweet potatoes, rolls with butter, peas, cranberries, a veggie tray, pumpkin pie with whipped cream, and coffee and milk, all in quantities sufficient to serve a family of 10 with plenty for leftovers.
Foods showing the largest decreases this year in addition to turkey were a gallon of milk, $2.92; a 3-pound bag of sweet potatoes, $3.39; a 1-pound bag of green peas, $1.47; and a dozen rolls, $2.25.
Several items saw modest price increases this year including cranberries, pumpkin pie mix and stuffing. A 12-ounce bag of fresh cranberries was $2.65; a 30-ounce can of pumpkin pie mix was $3.33; a 14-ounce package of cubed bread stuffing was $2.87; two nine-inch pie shells came in at $2.47 and a 1-pound veggie tray was $.75. A group of miscellaneous items including coffee and ingredients necessary to prepare the meal (butter, evaporated milk, onions, eggs, sugar and flour) was also up slightly, to $3.01.
There was no change in price for a half-pint of whipping cream at $2.08. The stable average price reported this year by Farm Bureau for a classic Thanksgiving dinner tracks with the government's Consumer Price Index for food eaten at home. But while the most recent CPI report for food at home shows a 0.1 percent increase over the past year (available online at https://www.bls.gov/…) the Farm Bureau survey shows a decline of less than 1 percent.
After adjusting for inflation, the cost of this year's Thanksgiving dinner is $19.37, the most affordable in more than a decade.
New this year, to capture the diversity in Thanksgiving meals across the U.S., American Farm Bureau also checked prices on a 4-pound bone-in ham, 5 pounds of Russet potatoes and 1-pound of frozen green beans.
"Adding these foods to the classic Thanksgiving menu increased the overall cost slightly, to $61.72 or about $6 per person," said Newton.
A total of 166 volunteer shoppers checked prices at grocery stores in 37 states for this year's survey. Farm Bureau volunteer shoppers are asked to look for the best possible prices, without taking advantage of special promotional coupons or purchase deals, such as spending $50 and receiving a free turkey. Shoppers with an eye for bargains in all areas of the country should be able to purchase individual menu items at prices comparable to the Farm Bureau survey averages. Farm Bureau also surveyed the price of a traditional Thanksgiving meal available from popular food delivery services. This revealed that the convenience of food delivery does have a larger price tag. A 16-pound turkey was nearly 50 percent more expensive at nearly $2 per pound when purchased from a food delivery service. Nearly every individual item was more expensive compared to the Farm Bureau average and the total cost of the dinner was about 60 percent higher at about $8 per person.
The AFBF Thanksgiving dinner survey was first conducted in 1986. While Farm Bureau does not make any scientific claims about the data, it is an informal gauge of price trends around the nation. Farm Bureau's survey menu has remained unchanged since 1986 to allow for consistent price comparisons.
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