One reason fed steer prices are fading may be because the ones being sold to packers are larger, producing more meat per head and reducing the slaughter need.
A look at USDA data compiled and published by the Livestock Marketing Information Center in Denver shows that carcass weights of slaughtered steers and heifers remain well above last year and the 2018-2022 average. Weekly steer carcass weights turned down recently, but they have a long way to go before meeting the declining 2023 or the previous five-year average.
DRESSED WEIGHTS FINALLY EASING
Steer dressed weights for the first week of April averaged 919 pounds per head, down four, or 0.43%, from 923 a week earlier and down five, or 0.54%, from the March peak of 924 set the third week of March. Yet this was up 27 pounds, or 3.03%, from the 892 pounds registered in the same week last year and up 31.4, or 3.54%, from the previous five-year average of 887.6 pounds.
Heifer dressed weights the first week of April averaged 849 pounds, up one from the previous week but down one from the March high of 850 in the third week of March. This was up 21 pounds, or 2.54%, from 828 in the same week in 2023 and up 27.6 pounds, or 3.36%, from the 2018-2022 average of 821.4 pounds.
Fed steer and heifer carcass weights have a strong seasonal tendency to decline from early January into late May/early June as calves that were placed on feed at lighter-than-optimum weights in the fall and fight their way through the winter are finally worked through.
It is, therefore, very unusual for fed steer and heifer carcass weights to rise in February and March. And the seasonal tug could be expected to get stronger each week.
SLAUGHTER STEER PRICES FADING
USDA data show that weekly slaughter steer prices are fading. They remain higher than last year and well above the previous five-year average, but they appear to have peaked for now.
The weekly USDA five-market weighted average price two weeks ago was $183.84 per cwt, down $1.89, or 1.02%, from $185.73 a week earlier and down $5.72, or 3.02%, from the March high of $189.56 set the third week of March. However, the latest price was $3.40, or 1.88%, higher than the $180.44-per-cwt price of a year earlier and $61.09, or 49.8%, higher than the previous five-year average of $122.75.
Generally, fed steer prices fade into the summer before rising in the fall. Last year, they rose into a June peak, held relatively firm into mid-fall.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $182.74 per cwt to $182.99, compared with last week’s range of $182.00 to $185.81 per cwt. FOB dressed steers, and heifers went for $289.83 per cwt to $290.32, compared with $287.22 to $292.58.
The USDA choice cutout Monday was up $0.26 per cwt at $295.93 while select was up $1.04 at $291.87. The choice/select spread narrowed to $4.06 from $4.84 with 80 loads of fabricated product and 23 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $349.31 per cwt, and 50% beef was $88.47.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.03 at $1.43 to $1.53 a bushel over the May corn contract, which settled at $4.39 3/4 a bushel, up $0.06 1/4.
No live cattle contracts were tendered for delivery Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $242.11 per cwt, up $0.38. This compares with Monday’s Apr contract settlement of $242.90, up $1.57 and May’s $245.17, up $3.17.