As has been anticipated for several months, beef production is decreasing, said Oklahoma State University Agricultural Economist Derrell Peel in a letter to Extension agents.
Through most of March, beef production averaged 6.4% lower compared to the same period last year, the result of decreases in both cattle slaughter and carcass weights, Peel said.
STEER SLAUGHTER DOWN
Steer slaughter was down 5.3% year over year in the last month, and steer carcass weights averaged 903 pounds, down 16, he said. Heifer slaughter finally begun to decrease and is down 1.6%, with heifer carcass weights at 830 pounds, down 20.
Cow slaughter is down 6.8% year over year in the last four weeks, including a 0.9% increase in dairy cow slaughter and a 13.65 year over year decrease in beef cow slaughter. Cow carcass weights averaged 646 pounds in the last month, 11 pounds lower than the same period last year.
Bull slaughter is down 14.6% from one year ago, Peel said. Bull carcass weights averaged 854 pounds in the last four weeks, down 26 from one year ago.
CHOICE BEEF PRICES UP
Choice boxed beef cutout values averaged $285.13 per cwt in the last month, up 11.0% year over year, he said. Boxed beef prices are led by higher middle meat values, with ribs up 21.4% and loins up 15.5% year over year.
Chuck values averaged 8.5% higher with rounds up 1.3% year over year, Peel said. Short plates were 13.5% higher with flanks up 16.4% year over year. Only the brisket is down, 8.5% lower compared with last year.
Select beef cutout and primal values were higher by similar amounts, Peel said.
The choice-select spread continued to inch toward a seasonal low, he said. The spread typically reaches a seasonal low in February. The current spread is running about a month later than usual.
BEEF PRODUCTION SEEN LOWER
Beef production is expected to drop more sharply for the remainder of the year, Peel said, adding even more supply support prices. Current estimates for 2023 have production decreasing from 4.5% to 6% year over year.
Decreasing cow slaughter already is pushing 90% lean trimmings prices higher, and decreased fed slaughter is pushing 50% trimmings higher as well, Peel said. The latest Cold Storage report showed seasonally lower beef in cold storage, down 5.9% year over year, likely mostly reflecting the seasonal drawdown in beef trimmings. This contrasts with last year, when cold storage inventories remained high all year because of large cow slaughter.
Seasonal grilling demand typically adds support for some beef cuts and ground beef, he said. Wholesale beef market values typically begin to reflect this demand in April in preparation for the Memorial Day holiday.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $168.76 to $169.66 per cwt, compared with last week’s range of $163.20 to $166.06. FOB dressed steers, and heifers went for $262.52 to $262.62 per cwt, versus $255.92 to $262.06.
The USDA choice cutout Monday was up $3.02 per cwt at $285.09 while select was up $3.46 at $274.18. The choice/select spread narrowed to $10.91 from $11.35 with 61 loads of fabricated product and 14 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged to down $0.02 at $1.60 to $1.68 a bushel over the May corn contract. Bids in Kansas were not available. The May contract settled at $6.50 3/4 a bushel, down $0.07.
The CME Feeder Cattle Index for the seven days ended Friday was $191.68 per cwt, down $1.66. This compares with Monday’s Apr contract settlement of $198.95 per cwt, down $1.87.