US cattle prices edge higher as slaughter adjusts

In the northern US, cash cattle trade showed moderate gains last week. Live sales were reported at US$/cwt 245–246, up US$/cwt 1 to 2 from the previous week. Dressed trade ranged from US$/cwt 378 to 382, US$/cwt 1 to 4 higher. In the south, prices moved up to US$/cwt 246–249.

In Texas, most sales were reported at US$/cwt 248, although several transactions went unreported by USDA as they were negotiated at US$/cwt 1 to 3 over the established tops. In Kansas, trade was mainly at US$/cwt 248–249, with some deals also exceeding published price levels.

Weekly slaughter totaled 541,000 head, 6,000 above the prior week but 21,000 below the same week last year. Throughput is expected to remain near current levels in the coming weeks as packers adjust to recent plant closures and revised operating rates at remaining facilities.

According to The AG Center report, both processors and feedlots are facing negative margins. High-cost feedlot placements from last year are now being marketed into cash prices that fail to generate a return, creating a challenging scenario in which both segments of the chain are under financial pressure.