The first week of February, 500-pound steers in Oklahoma posted a weekly record price of $321.34 per cwt, surpassing the previous high of $312.72 in November 2014, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
For the first three weeks of February, the price of those steers averaged $323.64 per cwt, Peel said.
For the 800-pound steers, February prices averaged $235.36 per cwt, still less than the September 2023 record of $253.58, which exceed the previous high in October 2014 of $241.79, he said. The feeder market correction in late 2023 took the price of 800-pound steers to a low of $216.47 per cwt in December with the price rallying back some $19 thus far in 2024.
Oklahoma feeder auction volume thus far in 2024 is down 14.6%, Peel said.
ON-FEED REPORT MAY SHOW LOWER PLACEMENTS
The pending USDA February Cattle on Feed report was expected to show lower January placements but with a Feb. 1 feedlot total still higher than one year ago, he said.
Feedlots are quite full and are dealing with muddy conditions and lost performance from winter weather, he said. The pen conditions resulted in sluggish cash fed market conditions with fed prices dropping about $1.00 per cwt last week to $180.
On-feed numbers are expected to tighten in coming months as the reality of limited feeder supplies becomes apparent, Peel said. Estimated feeder supplies were down 4.2% year over year in the January Cattle (Inventory) report, the lowest in data back to 1972.
The key once again is the question of heifer retention, he said. If and when heifer retention begins, feedlot inventories will drop more sharply,
LOWER BEEF PRODUCTION
Beef production is projected to decrease roughly 5% this year, Peel said. This follows a 4.7% decrease in 2023 from record 2022 levels. In the first few weeks of 2024, beef production was down 4.2% year over year.
Cattle slaughter likely will decrease this year with fewer steers and heifers and decreased beef cow slaughter, he said. Thus far in 2024, steer and heifer slaughter is down 3.3% with beef cow slaughter down 15.7%.
Steer and heifer carcass weights have dropped sharply in recent weeks, a result of earlier winter weather, Peel said. Current steer carcass weights are close to year ago levels at 909 pounds, having dropped from highs of 942 pounds in late December.
Although carcass weights dropped slightly in 2023, there is a good chance that carcass weights will increase modestly this year with cheaper feedlot costs along with cattle feeders and packers having incentives to find pounds wherever they can in the face of decreasing cattle supplies.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $175.66 per cwt to $182.19, compared with last week’s range of $175.69 to $183.00 per cwt. FOB dressed steers, and heifers went for $283.88 per cwt to $288.11, compared with $280.06 to $290.07.
The USDA choice cutout Thursday was up $1.99 per cwt at $299.79 while select was up $1.35 at $285.81. The choice/select spread widened to $13.98 from $13.34 with 121 loads of fabricated product and 23 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 at $1.35 to $1.45 a bushel over the Mar corn contract, which settled at $4.06 a bushel, down $0.05.
No steer or heifer contracts were tendered Thursday for delivery against the Feb live cattle contract.
The CME Feeder Cattle Index for the seven days ended Wednesday was $244.49 per cwt, up $1.83. This compares with Thursday’s Mar contract settlement of $252.05, up $0.70.