Weekly beef production took an unusual downturn in June, according to data from the USDA’s Agricultural Marketing Service and its National Agricultural Statistics Service.
The data, which was compiled by the Livestock Marketing Information Center in Denver, showed a drop in production for the Memorial Day week and a recovery the following week. However, weekly production fell back over the last three weeks were it normally runs at a higher level going into the Independence Day holiday.
BEEF PRODUCTION DOWN
While beef production has been supported by growing cattle larger than last year, the decline in slaughter-ready numbers is catching up. So far this year, the US has slaughtered 15.6 million cattle, down about 6.4% from 14.6 million a year ago, beef production was listed at 13.120 billion pounds down 3.2% from 12.7 billion a year ago.
An LMIC line graph of weekly beef production shows weekly production has been less than the 2019-2023 average nearly every week this year and often was less than the same week a year ago as well. In the latest decline, weekly beef production was below the average since the first week in April.
Beef production likely will drop again this week as packing plants close in observance of the Independence Day holiday Friday.
PRODUCTION COULD STAY SUBDUED
With fewer cattle placed into feedlots and fewer cattle coming to slaughter, beef production this year and next year could remain subdued, a market analyst said.
Last year’s weekly beef production plotted on the LMIC graph is less than the previous five-year average in all but three weeks for the rest of the year, and there’s little reason to think it will be any different this year with fewer cattle on feed, even if they are larger, the analyst said.
After the Independence Day holiday dip in weekly beef production, the next major weekly drop is the Labor Day holiday week.
Interestingly, the average production drop for Labor Day is the second smallest of the holiday weeks. The lowest weekly production drop occurs in the Thanksgiving Day week.
Other than the holiday weeks, the general trend in weekly beef production from here to the Christmas and New Year’s interruptions is a slow climb. The analyst said this likely is because there is a growing percentage of cattle that were placed as yearlings rather than calves, so they are larger when they exit the feed yard.
It’s also interesting that the percentage of beef that is graded USDA choice hits a seasonal low about June. It rises to a smaller peak in July but fades to the annual low in late October or early November.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $225.63 per cwt to $236.67, compared with last week’s range of $229.67 to $239.21 per cwt. FOB dressed steers, and heifers went for $357.91 per cwt to $365.67, compared with $360.16 to $373.52.
The USDA choice cutout Wednesday was down $0.74 per cwt at $394.86 while select was up $0.25 at $380.31. The choice/select spread narrowed to $14.55 from $15.54 with 90 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $413.09 per cwt, and 50% beef was $258.42.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.30 to $1.35 a bushel over the Sep corn contract, which settled at $4.18, up $0.12.
The CME Feeder Cattle Index for the seven days ended Tuesday was $314.10 per cwt, down $0.97. This compares with Wednesday’s Aug contract settlement of $309.02, up $3.00.