Strong seasonal demand and recent decreases in beef production have pushed beef prices sharply higher, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
The last week of May, the choice USDA boxed beef price was $364.92 per cwt, up 16.5% year over year and has increased 7.7% in just the last seven weeks, Peel said. Cutout values typically increase to a seasonal peak in May but the increase this year has been more pronounced than usual because of generally strong beef demand and declining beef production.
The increase in boxed beef cutout values from March to May was roughly twice the normal seasonal increase over the period, he said.
BEEF PRODUCTION SLIPS
Slaughter and beef production have begun to decrease with total beef production down for the last seven weeks for a total decrease of 4.4% year over year, Peel said.
The big change is fed beef production, which was higher in 2024 and is still 1.2% higher year over year for the year to date but is down six of the past seven weeks for a total decrease of 3.3% compared with the same period one year ago, he said. In the last seven weeks, total fed steer and heifer slaughter is down 5.6% with steer slaughter down 5.5% and heifer slaughter down 5.8% year over year.
That contrasts with 2024 when steer slaughter was up 0.4% and heifer slaughter was down a scant 0.3% year over year leading to total fed slaughter up 0.3% for the year, Peel said.
NON-FED BEEF PRODUCTION DECLINES
Non-fed beef production continues the decline of the past two years, he said. In the first 19 weeks of 2025, non-fed beef production was down 9.7% year over year, following a decrease of 12.7% last year.
Thus far in the year, total cow slaughter is down 12.8% with dairy cow slaughter down 8.4% and beef cow slaughter down 17.0%, Peel said.
The decrease in non-fed beef production was reflected in the trimmings market, he said. The price of 90% lean trimmings was $383.41 per cwt, up 8.3% over last year.
The recent decrease in fed slaughter also pushed prices for 50% lean trimmings sharply higher, with the latest weekly price at $126.91 per cwt, up 67.1% year over year, Peel said. A 5:1 ratio of 90s to 50s – which produces an 83.3% blend – was valued at $340.66 per cwt, up 10.7% year over year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $225.15 per cwt to $239.52, compared with last week’s range of $223.72 to $234.90 per cwt. FOB dressed steers, and heifers went for $353.24 per cwt to $376.32, compared with $349.46 to $370.67.
The USDA choice cutout Wednesday was up $3.00 per cwt at $374.76 while select was up $0.91 at $360.75. The choice/select spread widened to $14.01 from $11.92 with 90 loads of fabricated product and 18 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $387.88 per cwt, and 50% beef was $143.98.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.05 to $0.07 at $1.30 to $1.32 a bushel over the Jul corn contract, which settled at $4.37, down $0.01 3/4.
No live cattle delivery notices were posted.
The CME Feeder Cattle Index for the seven days ended Monday was $314.04 per cwt, up $3.58. This compares with Tuesday’s Aug contract settlement of $311.07, down $2.07.