Cash Cattle Prices Fall Below Year Ago

Cash prices for slaughter steers in the Southern Plains fell below year ago levels last week as the market more closely follows the seasonal pattern than the 2014 trend.

USDA data on cash prices shows an average price last week of $147.98 per cwt, down from $150.01 the week before and below $149.80 in the same week a year ago.

Last week’s average cash price, however, remains well above the previous five-year average of $104.02.

If slaughter steer prices continue to follow the seasonal pattern, they should bottom in the last week of July before seasonal increases in beef demand lift the cattle market and set it on course to meet its late Fall or early Winter high.




Beef and by-product markets are giving the cattle market mixed signals and could be part of the reason packers act like they have a somewhat tenuous hold on plant margins.

The USDA’s choice boxed beef cutout value rose last week to $254.27 per cwt from $249.87 the week before and appears range-bound between $240.00 and $260.00.  A graph of the USDA prices shows this year’s choice cutout values are loosely following the seasonal, which also tends to be range-bound between $160.00 and $180.00.

However, beef demand appears to be shifting toward the select product since the spread between choice and select wholesale beef prices is narrowing while choice product is holding its own or rising.

The narrowing of the choice/select spread is seasonal, but it’s happening at least a month earlier than normal.

A Livestock Marketing Information Center graph shows the strong seasonal tendency to bottom the first week of August.  It even bottomed there last year even though the narrowing peaked in mid-May.

This year, the peak occurred the last week of May, but the spread has narrowed quickly.  A quick look at the graph might imply an early bottoming of the spread is in store, but the seasonal calendar of events appears to be very strong.




The value of beef by-products like hides and offal are sinking fast and are approaching historical norms as the value of the US dollar has strengthened over the last months.

The price of crude oil, from which most synthetic fibers are produced also is down, which may have something to do with the hide portion of the hide and offal value as demand shifts to the synthetic fabrics.




Cash cattle markets this week are quiet, although with the Independence Day holiday approaching this weekend, some business may be done today.

Cash cattle markets last week were steady to $2 per cwt lower at mostly $148 on a live basis and $237 to $240 on a dressed basis.  Trading was moderately active.

Feedlot showlists appear to be about steady, depending on which estimate is viewed, which could be somewhat supportive to prices since packer buyers will be seeking to cover a full week’s worth of production.

Boxed beef prices were mixed Tuesday, with the USDA reporting its choice cutout value at $252.73 per cwt, down $0.49, and its select cutout at $249.35, up $0.71.

Volume Monday was moderate, with 98 loads of fabricated product being sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $228.45 per cwt, down $0.61.  This compares with the Aug futures settlement of $214.72.