Tennessee livestock market report, week ending Oct. 27

FED CATTLE: Fed cattle traded $2 to $3 lower on a live basis compared to last week with live prices mainly between $182 and $184 while dressed prices were mainly $290.

The 5-area weighted average prices through Thursday were $183.72 live, down $2.39 compared to last week and $290.07 dressed, down $3.72 from a week ago. A year ago, prices were $151.84 live and $239.83 dressed.

Cattle feeders may consider this week’s prices a win despite the rather large de- cline compared to the previous week’s cash price. The support of this statement is in October live cattle futures trade, which experienced a $6 per hundred-weight price decline on Monday compared to the previous Friday. That decline sent October live cattle futures from $184 to $178. The futures market recovered throughout the week and essentially is trading at an even basis with cash prices.

There are probably dozens of reasons people will say prices fell flat on Monday with the main one being high cattle on feed numbers reported on Friday. However, the market recaptured more than $5, which simply says people overreact to information.

BEEF CUTOUT: At midday Friday, the Choice cutout was $308.12 up $1.27 from Thursday and up $2.98 from a week ago.

The Select cutout was $280.13 up $0.44 from Thursday and up $4.68 from last week. The Choice Select spread was $27.99 compared to $26.90 a week ago.

Beef and veal imports the first eight months of the year are 5.4 percent higher in 2023 than the same months in 2022. Beef and veal exports over the same time period are down 13.9 percent compared to year ago levels. These two values have come to fruition due to reduced beef pro- duction and higher beef prices domestically. However, these are not the only two aspects of the international market to keep an eye on. Another statistic to watch is feeder cattle imports from Mexico and Canada. For instance, 2023 weekly feeder cattle imports from Mexico are up nearly 50 percent compared to 2022 and total more than 928,000 head year to date. At the same time, cattle exports to Mexico have totaled less than 25,000 head, which is a 65 percent decline from the previous year. Imports of feeder cattle from Canada have not had the same yearly trend, but imports of Canadian feeder cattle have begun to pick up the past several weeks. Imports of cattle will certainly influence beef production in coming months.

OUTLOOK: Based on Tennessee weekly auction price averages, steers prices were $4 to $7 lower compared to last week while heifer prices were $1 to $5 lower compared to a week ago. Slaughter cow prices were $1 to $2 lower than last week’s weighted average price while bull prices were $2 to $3 lower compared to the previous week. November feeder cattle futures are at their lowest point since June 22nd and are about $30 per hundredweight lower than the life of contract high. This is good for those who hedged the sale of feeder cattle for November anytime from the beginning of July through the middle of October, be- cause it is likely the hedge will pay off. Alternatively, those who did not hedge cattle will have missed out on the marketing opportunity. Whether in agreeance or not, current feeder cattle futures still seem to be overvaluing cattle through most of 2024. Before anyone gets too ex- cited about that statement, it is important to evaluate how much a person would be willing to pay for the same animal themselves. For instance, if a person thinks cattle are undervalued then those people should be purchasing cattle to capitalize on the opportunity. There is no way to accurately predict prices on any given day, but further softening in the futures market is expected. Despite the futures market faltering, the cash market has not seen the same decline. Seasonal tendencies have established themselves in the fall calf market with prices slipping the past couple of weeks on freshly weaned calves. These prices may decline a few more dollars with the 30 degree decline in day time temperatures to end October and begin November. Additionally, there may be lighter offerings of calves next week given the lower temperatures and expectations of precipitation. This is a fluid environment from both the weather perspective and the market perspective. Nothing is certain except death and taxes, and those are both uplifting topics!