Fed Cattle Prices Continue Slide

Cash fed cattle prices were lower last week for the fourth straight week of declines, exacerbating feedlot losses and representing the 12th straight week that fed cattle prices have been below a year ago.

Many feedlots are pushing cattle out because packer discounts for YG4 and YG5 carcasses are growing after being very low to near zero for months.  For the first 24 weeks of the year, fed cattle prices exceeded year-earlier marks by an average of more than $14 per cwt on a live basis.  But since then, prices have averaged $9 below a year ago, and the gap continues to widen.

Fed cattle prices were expected to continue declining for the next several weeks, but some see a rebound by December.




University of Tennessee Agricultural Economist Andrew Griffith pointed out in a research paper that the USDA’s choice cutout value has declined nearly $7 over the last three weeks while the select cutout slid nearly $8.  Now that the summer grilling holidays are gone, it will be difficult for packers and retailers to move beef at higher prices.

Consumers tend to eat more beef around holiday events, especially those associated with spring or summer weather conditions when the back yard grill can be employed.

Many people grill at other times as well, which increases beef consumption.  A noticeable increase in beef demand can be seen over those same warmer months, even though it spikes around the grilling holidays.

In some markets, grilling also is associated with tailgating at professional sporting events, which stretches the grilling season in these cities but not beyond.

There generally is a lull in national demand after the Labor Day holiday, which draws a close to the grilling season for many consumers.  Even though weather conditions may be very conducive to outdoor activities, many just don’t.  Consumer interest in high-end beef products won’t pick up until closer to the year-end holidays.

Packer demand for slaughter cattle necessarily will have to increase before then, but this usually doesn’t tip the price charts until October, leaving September markets to languish.




As US domestic cattle and beef markets deal with seasonal price trends, the international side of things has its own issues and doesn’t appear to be the white knight cattle producers may be hoping for.

For a variety of reasons, a generally stronger US dollar being among them, the slowdown in beef exports likely will continue to hamper US domestic beef price advances, Griffith said.

Additionally, beef imports are likely to grow and compete with domestic production since the rise in the US dollar makes these products less expensive for grinders.  USDA records show that in the first seven months of the year, the US has imported 32.4% more beef and veal than in the same period last year.




No fed cattle trading was reported in the Central and Southern Plains Tuesday.  Feedlot showlists are smaller in most areas, giving cattle owners more price leverage in this week’s negotiations, yet no bids from packer buyers were reported.

Asking prices ranged from $140 to $143 per cwt on a live basis and $220 to $222 on a dressed basis.

Last week’s cash cattle markets traded lower – from $139 to $142 per cwt on a live basis, about $1 below the previous week.  On a dressed basis, cattle traded from $217 to $220 per cwt, down $3.

The USDA reported lower boxed beef prices again on Tuesday with its choice cutout down $1.65 per cwt at $233.49 and select off $0.68 at $225.01 with 146 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $203.75 per cwt, down $1.58.  This compares with the Sep settlement Tuesday of $198.32, down $1.82.