For the last five weeks, cutter cow (90% lean) prices have been more than $90 per cwt on a live basis, said the Livestock Marketing Information Center in a market analysis called Livestock Monitor.
This year started with a weekly price for cutter cows of $67.60 per cwt. It then climbed steadily into midyear, the LMIC said. The latest peak came three weeks ago at $94.08 per cwt, up $22.73, or 31.9%, from $71.35 a year ago and up $38.37, or 68.9%, from the 2017-2021 average of $55.71.
CUTTERS UP FROM 2022, FIVE-YEAR AVERAGE
Cutter cow prices reported by the USDA have been higher than last year and the previous five-year average all year, and, despite the downturn of the last two weeks, there is little anecdotal evidence to recommend an impending drop to levels below the two benchmarks, a market analyst said. However, the market is approaching a slow seasonal decline into mid-December.
National cutter cow prices have not been more than $90 per cwt since 2015, the analysis said.
The LMIC said it was interesting that even though federally inspected cow slaughter is running less than a year ago, the volume of cutter cows reported in the National Weekly Direct Cow and Bull Roundup is 15% more than last year. In fact, all grades of cow volumes are showing higher live-basis sold numbers with the exception of premium whites.
PRICE SPREAD SHRINKING
The spread in price between cutter cows and other grades of live-priced cows has shrunken considerably this year, the LMIC said. Last year, the average spread between premium whites and cutter cows was just over $10.00 per cwt. This year, the average is just under $4.00.
The same is true for breakers (75% lean) and boners (85% lean), the LMIC said. Breaker volumes are up 8% year to date, and the premium to cutters has averaged $6.77 vs the 2022 average of $10.61 per cwt.
Boner-graded cow volumes are up almost 400% from last year at this time, and the premium to cutters has averaged $4.84 per cwt this year, the analysis said. In 2022, the average was $7.01 per cwt.
Cutter cows priced on a dressed basis match more closely with federally inspected cow slaughter, down about 15% for those weighing more than 500 pounds, the LMIC said. Premium whites and breakers (500 pounds and above) volumes are heavier than a year ago, up 5% and 10% respectively.
Boner cows (500 pounds and above) are down 8% so far this year, the analysis said. Dressed cull cow prices are higher across all the grades, averaging 14-16% more than last year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $182.42 per cwt to $191.00, compared with last week’s range of $180.00 to $191.90 per cwt. FOB dressed steers, and heifers went for $289.58 per cwt to $295.18, compared with $284.05 to $299.87.
The USDA choice cutout Wednesday was down $2.66 per cwt at $334.25 while select was off $3.68 at $304.25. The choice/select spread widened to $30.00 from $28.98 with 106 loads of fabricated product and 34 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 $1.55 a bushel over the Jul corn contract, which settled at $6.71 a bushel, up $0.27 1/4.
No deliveries were tendered against Jun live cattle Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $222.18 per cwt, down $0.50. This compares with Wednesday’s Aug contract settlement of $227.72 per cwt, down $4.42.