The fed cattle market continues to pop, said Agricultural Economist David Anderson of Texas A&M University, in a Livestock Marketing Information Center letter called In The Cattle Markets.
“Pop as in a champagne cork not a balloon,” Anderson said.
There certainly have been some fluctuations in prices, especially in the futures market, over the last couple of weeks because of tariff announcements and recession fears, but cash fed cattle prices have rebounded quickly.
BY THE NUMBERS
The USDA’s five-market weighted average (price weighted across all grades) fed steer live prices averaged $205.19 per cwt on April 8, bringing the average price for that week down to $207.70, he said. The price quickly rebounded to more than $212 per cwt.
Fed cattle prices averaged over $211 per cwt for the three weeks prior to the tariff announcements, Anderson said. The fluctuations in the fed cattle market highlight the volatility in the market compared to some underlying fundamental conditions.
Calf and feeder cattle markets experienced similar price declines during that week, he said. Using Oklahoma auctions as an example, 500- to 600-pound steers declined $11 per cwt to $369.71 for the week of April 11.
They rebounded to $376 per cwt for the ensuing week. Feeder steers weight 700 to 800 pounds dropped $10 to $289 before bouncing back to more than $300 per cwt.
CUTOUT VARIABLE
The boxed beef cutout showed some ups and downs over the last few weeks that appeared to be more reflective of the beginning of grilling season purchasing, Anderson said. The prime-choice cutout premium declined to $25 per cwt in mid-April from more than $60 per cwt in January. This premium was $28 per cwt last year at this time.
Cattle and beef prices remain higher than last year, even with some volatility, while beef production remains relatively close to last year, he said. For the year through April 26, beef production was equal to last year.
However, over the last month beef production was down 1.3% compared with last year, Anderson said. Using the USDA’s daily slaughter data, fed steer and heifer slaughter was down 2.8% in April compared with last April. Heavier weights were continuing to boost beef production.
The risk of tariffs and retaliation along with recession worries remain and likely will lead to more price volatility in coming weeks, he said. But fundamental factors, like fewer cattle, will continue to support high prices.
High cutout values reflect a little less beef production in recent weeks but also continued positive consumer demand, Anderson said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $212.26 per cwt to $219.77, compared with last week’s range of $207.38 to $214.72 per cwt. FOB dressed steers, and heifers went for $329.37 per cwt to $339.02, compared with $321.91 to $336.58.
The USDA choice cutout Thursday was down $2.14 per cwt at $343.17 while select was up $2.26 at $324.28. The choice/select spread narrowed to $18.89 from $23.29 with 78 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $374.68 per cwt, and 50% beef was $119.27.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.18 to $1.30 a bushel over the May corn contract, which settled at $4.64 1/4, down $0.03.
No live cattle were tendered for delivery Thursday.
The CME Feeder Cattle Index for the seven days ended Wednesday was $296.10 per cwt, up $0.33. This compares with Thursday’s May contract settlement of $293.22, up $0.65.