Fed cattle prices are ending 2024 at near-record highs, sealing a three-year rally, according to USDA data.
Just a few more fed cattle are expected to trade before the year ends at midnight, and the five-Market average fed price for 50 weeks through mid-December was $186.66 per cwt, up 6% from a year earlier and up 29.2% over 2022’s fed prices, said Oklahoma State University Livestock Marketing Specialist Derrell Peel in a letter called Cow-Calf Corner.
The 2024 average price so far is 21.3% higher than the previous average high in 2014, Peel said. The highest weekly fed price was $197.09 per cwt in early July and was expected to end the year with z price close to that level.
COMPARISONS TO THE LAST PEAK
The current high prices are reminiscent of the cyclical peak prices of 2014–2015 with both having been provoked by drought-exaggerated herd liquidations, Peel said. However, some very important differences mean the current situation will play out in a much different fashion going forward.
The herd rebuild in 2014–2019 was sharp and rapid, leading to relatively brief high prices lasting about two years, he said. This was possible because the pipeline of replacement heifers had been building prior to herd expansion.
With two years of high prices already in 2023-2024, there is no indication that cyclically high prices will be as short lived as a decade ago, Peel said. The pipeline of replacement heifers has continued to be depleted to this point.
The cattle industry has shown no signs of attempting to rebuild the herd yet. and the process will be slower when it does happen, he said. The peak prices in 2014-2015 coincided with increased heifer retention that squeezed feeder supplies to their tightest levels.
Since no heifer retention has occurred yet, the highest prices are ahead, possibly in 2025 but more likely beyond, Peel said.
FEEDERS ALSO FINISH NEAR RECORD
Feeder auction trading is finished for the year with new record prices in 2024, Peel said. Combined Oklahoma auction prices for 500-pound steers (M/L, Number 1) averaged $320.14 per cwt with the highest weekly price of $360.99 per cwt in early December.
The average price this year was up 18.6% over 2023 and was up 62.6% from 2022, he said. The 2024 average price exceeded the previous record high in 2015 by 21.3%.
The average price of 800-pound steers this year was $247.43 per cwt, up 14.7% and up 50.5% from 2022. The highest weekly price for these steers was $264.74 per cwt in early July and only slightly below that in December.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $191.11 per cwt to $193.03, compared with last week’s range of $191.00 to $196.58 per cwt. FOB dressed steers, and heifers went for $304.58 per cwt to $306.55, compared with $300.56 to $308.10.
The USDA choice cutout Monday was up $2.99 per cwt at $325.37 while select was up $3.63 at $294.76. The choice/select spread narrowed to $30.61 from $31.25 with 85 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $323.82 per cwt, and 50% beef was $77.33.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.19 to $1.35 a bushel over the Mar corn contract, which settled at $4.52 1/4, down $0.01 3/4.
No delivery intentions were posted for the Dec live cattle contract Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $253.97 per cwt, down $4.35. This compares with Monday’s Jan contract settlement of $261.62, up $0.25.