Slaughter steer prices increasingly appear to have fallen into the fall pattern of sideways prices, albeit in a wider, more volatile range.
USDA data compiled by the Livestock Marketing Information center show Southern Plains slaughter steer prices peaking at an average $163.77 per cwt on a live basis during the last week of July. The price subsequently declined to its most recent low of $152.53 during the third week of August only to rise again and retest the high at $162.86 two weeks ago. Last week’s average price dipped to $161.53.
Average prices tend to stick within a $2 range from September through November.
Prior to settling into the current sideways pattern, fed cattle prices in the Southern Plains moved upward in a counter-seasonal trend. They began to show signs of flattening in early July, but the range of the sideways pattern has been so wide, it was difficult to call the market rangebound.
It still may be out of line to say so, but the market clearly is jittery at these levels without something new that would propel it to higher levels. It also can’t seem to convince itself to retreat, given the current short-supplied market.
NEW BOOK COULD BE KEY
In the search for that demand factor, a new book by Nina Teicholz, an independent investigative journalist, could be key. She spent nine years reviewing 50 years of research and interviewing nutrition experts to conclude that nearly everything the American Heart Association and the USDA have taught about saturated fat and heart disease is wrong.
Her book, “The Big Fat Surprise: Why Butter, Meat And Cheese Belong In A Healthy Diet,” concluded, among other things, that fat does not make one fat, evidence does not show saturated fat contributes to heart disease or cancer, and that red meat is the only food that actually improves “good” HDL cholesterol levels.
Teicholz also contended that the switch from diets containing saturated fats increased carbohydrate consumption, which contributes to obesity and diabetes.
Many academics dismiss her findings, but the book may cause a stir among consumers who would like to eat more meat. If it does, a cynical public may not be as conflicted about consuming choice beef, raising demand levels and fed cattle prices.
FEEDER STEERS CONTINUE STRONG
But while fed steer prices may have entered a sideways channel, it appears that feeder steers continue to follow last year’s pattern of higher prices. If the pattern holds, feeder steers likely won’t level until late October after wheat pasture is full.
USDA data show Southern Plains 700- to 800-pound feeder steers last week selling for an average of $232.62 per cwt, up $4.03, or 1.76%, from $228.59 a week earlier and $3.03, or 1.32%, above the previous record high of $229.59, set the first week of August.
But the market really doesn’t like prices to be this high, as shown by increasing volatility since June. Instead of a smooth rise to higher prices, like last year, prices this year showed a generally smooth rise into June when resistance appeared.
BOXED BEEF SOFTENS
Boxed beef markets softened again Monday and fell below week-ago levels. The USDA reported its choice cutout at $249.02 per cwt, down $0.91 for the day, and off $2.37 for the week.
Select was down $1.26 to $233.28, and was down $4.56 from $237.84 the week before.
The CME Feeder Cattle Index for the seven days ended Friday was $230.04, up $2.30 from the previous day, while the Sep contract settled Monday at $229.25, down $0.22.