With the first half of 2024 in the books, it’s worth evaluating the first six months and what to expect for the remainder of the year, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
CATTLE AT RECORD HIGHS
At mid-year, cattle prices were record high, Peel said. Fed steers averaged $195.81 per cwt, live basis, and 850-pound, med/large, No. 1 steers averaged $255.41 per cwt in Oklahoma auctions prior to July 4.
Likewise boning cull cows averaged $143.22 per cwt with high dressing breaker cows averaging $154.41 per cwt, he said. Steer calves were priced slightly below the March seasonal peak but averaged $324.53 per cwt before July 4 for 475-pound med/large, No. 1 steers, down from the $350.85-per-cwt March average.
BEEF PRODUCTION DOWN
First-half beef production was down 1.6% year over year, less than expected, Peel said. All of the reduction was in non-fed beef, with fed beef production 0.7% higher, and non-fed beef production was down 12.5% year over year.
Steer slaughter was down 1.7%, and heifer slaughter was down 1.5% so far this year, but sharply higher steer and heifer carcass weights more than offset the modest decreases in slaughter, he said.
First-half carcass weight showed little seasonal decline, and steer carcasses averaged 32 pounds heavier year over year in the second quarter with heifer carcasses 26 pounds heavier, Peel said.
CHOICE PRICES NEAR STEADY
Choice boxed beef prices were just about equal to a year earlier with a price of $329.96 per cwt in early July, he said. Wholesale prices for popular grilling steaks were strong at midyear.
The reduction in non-fed beef production, combined with strong ground beef demand, pushed 90% lean trimmings and subsequent wholesale ground beef prices to record highs, Peel said. A mix of five pounds of 90% lean and one pound of 50% lean resulting in an 83.3% lean ground beef formulation had a record wholesale price of $3.26 a pound in early July.
STUBBORN FEEDLOT INVENTORIES
Feedlot inventories have been stubbornly slow to decrease with annual average monthly feedlot inventories down just 2.2% since the peak in Sept 2022, he said. Feedlot placements were declining, but feedlot inventories remained high because of more days on feed and continued large heifer slaughter rates. The strong heifer slaughter suggests that little, if any, heifer retention for herd rebuilding has begun.
Supply fundamentals will continue to tighten for the rest of the year and beyond, Peel said. Beef production likely will finish the year down 3.0% to 3.5% year over year, less than previously expected because of continued heavy carcass weights.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $190.00 per cwt to $200.93, compared with last week’s range of $189.71 to $200.07 per cwt. FOB dressed steers, and heifers went for $300.74 per cwt to $307.62, compared with $298.67 to $309.14.
The USDA choice cutout Wednesday was down $1.61 per cwt at $324.05 while select was down $0.37 at $303.94. The choice/select spread narrowed to $20.11 from $21.35 with 124 loads of fabricated product and 32 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $379.75 per cwt, and 50% beef was $115.67.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.62 to $1.78 a bushel over the Sep corn contract, which settled at $3.95 3/4 a bushel, up $0.01 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $258.15 per cwt, up $0.82. This compares with Wednesday’s Aug contract settlement of $254.35, down $1.37.