Fed cattle markets definitely are in the middle of the summer swoon.
Fed cattle prices moved lower in June, finishing at $118.86 per cwt in the Southern Plains, down $17.46, or 12.8%, from $136.32 in the last week of May.
While the average weekly price remained just above last year’s, the ratcheting down of cattle prices looks a lot like last year’s chart pattern, said David Anderson, extension agricultural economist at Texas A&M University in the Livestock Marketing Information Center’s In the Cattle Markets.
And not only have cattle prices declined, but the choice beef cutout is down about $25 per cwt over the same period.
One reason for the lower prices is that retail meat buyers began filling their Independence Day orders, and now that the big demand holidays of Memorial Day and Independence Day are past, some of the push is off, Anderson said.
And it’s a long time until the Labor Day holiday.
In addition, after a period of relatively tight supplies fueled by a rapid pace of slaughter earlier in the year and fed cattle weights well below a year ago, supplies are starting to increase seasonally, he said. Steer slaughter remains slightly above last year, while heifer slaughter has run close to 10% above last year.
Steer dressed weights also are increasing, Anderson said, as they usually do this time of year. Steer dressed weights have increased 23 pounds since bottoming at 832 pounds the last week of April.
BEEF COW SLAUGHTER UP
The weeks following the Memorial Day holiday saw a dramatic increase in beef cow slaughter, up about 10,000 head a week, or almost 20% more than the same weeks in 2016. And for the year, beef cow slaughter is up about 9.8% over last year.
About 62% of the increase in total beef cow slaughter was in the Southern Plains, he said.
While cull cow prices in the Southern Plains have increased slightly over the past month, the cow beef cutout and 90% lean wholesale beef prices have increased sharply. The boxed cow-beef cutout hit $180 per cwt last week, up steadily from $158 at the beginning of the year.
Wholesale 90% lean boneless beef hit $229 per cwt the last week of June, up from $218 the same week last year.
Anderson credited the strength in lean boneless beef to relatively tight supplies of lean beef for ground beef and good interest in hamburgers from consumers.
CASH CATTLE QUIET
Fed cattle sales on the livestock exchange video auction Wednesday were very limited. One lot sold in the south at $117.75 per cwt, and one lot sold in the north at $117.25.
Last week, two sets of heifers, totaling 320 head, sold in Kansas at $119 and $119.25 per cwt, with an average of $119.52, and one group of Nebraska cattle sold at $120.
Cash cattle traded last week at $118 to $120 per cwt, mostly $119, down $3 to $4 from the previous week. On a dressed basis, cattle traded at $189 to $190, down $6.
The USDA’s choice cutout Wednesday was down $0.31 per cwt at $222.58, while select was off $2.13 at $205.32. The choice/select spread widened to $17.26 from $15.44 with 114 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday was $147.53 per cwt, down $0.27. This compares with Wednesday’s Aug settlement at $142.22, down $3.87.