Sharply higher fed cattle weights have increased beef production, but another wintery blast could temper this, said Oklahoma State University Extension Economist Derrell Peel, in a letter to Extension agents called Cow/Calf Corner.
After spending much of the year below year-ago levels on a weekly basis, carcass weights moved sharply higher in October and November, besting seasonal peaks and those of the same period last year, Peel said.
CARCASS WEIGHTS SOFTER
Steer carcass weights likely peaked in mid-November at 912 pounds, and weights have dropped only one pound from there, he said. In 2018, steer carcass weights peaked one week earlier at 904 pounds.
Steer carcass weights averaged 7.5 pounds more than last year for the past eight weeks of data, Peel said. For the year to date, steer carcass weights still were down year over year but are down just 2.7 pounds compared with last year.
Heifer carcass weights likely peaked at 742 pounds the third week of November and have dropped two pounds since then, Peel said. A year ago, weights peaked the last week of November at 838 pounds.
Heifer carcass weights have been higher year over year for the past seven weeks but have averaged 4.0 pounds below a year ago for the year to date.
BETTER FEEDLOT CONDITIONS
This fall’s sharply higher carcass weights reflect better feedlot conditions and performance after lots of struggles earlier in the year, Peel said. Data from the Kansas State University’s Focus on Feedlots showed average daily gains were down through the first three-quarters of the year with simultaneously poor feeding efficiency.
Total steer and heifer slaughter was projected to be up about 0.8% over last year, compared with 2018 with total cattle slaughter up about 1.2% at 33.4 million head, Peel said. Combined with modestly lower carcass weights, 2019 beef production was projected to be up 0.6% from last year at 27.0 billion pounds, just a few pounds shy of 2002’s record.
Poor feedlot conditions and performance likely contributed to a reduction in choice grading percentage that extended from late in the second quarter well into the fourth quarter of the year, Peel said. The result has been an unusually wide choice/select spread in the second half of the year that only recently narrowed back to more typical seasonal levels.
Since June, the weekly choice/select spread has averaged $22.84 per cwt, compared with $12.09 for the same period last year, he said. The most recent weekly choice/select spread was $14.67 per cwt.
Boxed beef prices peaked in mid-November with a weekly value of $240.66 per cwt for choice and $215.52 for select, Peel said. The current mid-December level of $219.14 per cwt for choice and $204.47 for select compares with choice boxed beef at $213.11 and select at $201.61 one year ago.
CATTLE, BEEF RECAP
Cash cattle trading was reported last week at $118 to $120.50 per cwt on a live basis, with the higher prices coming on Friday, steady to up $1 from last week, and at $188 to $190 on a dressed basis, steady, with higher values also on Friday.
The USDA choice cutout Wednesday was down $3.24 per cwt at $209.57, while select was off $1.90 at $201.57. The choice/select spread narrowed to $8.00 from $9.34 with 115 loads of fabricated product sold into the spot market.
No new contracts were tendered for delivery against the Dec delivery month Wednesday.
The CME Feeder Cattle index for the seven days ended Tuesday was $145.48 per cwt, up $0.38 from the previous day. This compares with Wednesday’s Jan contract settlement of $144.55, down $0.60.