August 26

8/26 - In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in July were down 2.1% from a year ago, but that the Aug 1st feedlot inventory, at 11.1M head, was still up 0.2%. The big news in beef is the fire that occurred on Aug 9 at the Tyson Fresh Meats plant in Holcomb, KS. The plant processed 6,000 head of cattle per day or 6.2% of the country’s total capacity. The shortfall will be very difficult to make up based on already tight industry capacity. Less processing capacity means less demand and lower prices for cattle. However, beef prices are headed higher because less beef is being processed. Cattle prices, which had hit their high for the year at $129.95/cwt in Feb, were $108.05 on 8/9, dropped to $99.93 on 8/16, and have since rebounded to $104.63/cwt. Conversely, USDA choice cut-out values have risen 10.1% between 8/9 to 8/23.