Fed steer and boxed beef prices could be about to rebound seasonally as consumer buying interest picks up with cooler weather.
Both sets of prices declined through August as consumer buying interest faded during the hot part of the summer. Consumers also were paying down some vacation debts and spending more for back-to-school supplies and clothes.
TRADITIONAL BEEF PRICE GAINS
Traditionally, wholesale choice beef prices see a late-August-early September price rally around the Labor Day holiday. This holiday is considered to be the last grilling holiday of the year, even though weather conditions would allow for it. Retail beef activity picks up in and around the holiday but fades as grocers pull back on aggressive advertising.
Southern Plains weekly slaughter steer prices tend to rise through the fall season as packers seek to maximize the availability of certain high-quality, cuts that are some of the smaller primals from the carcass. Annual weekly slaughter peaks come in late November or early December.
This year, the USDA reported Southern Plains fed steer prices peaked the first week of July at $329.96 per cwt. They have been in an uneven decline ever since down to last week’s $301.92, which was just higher than last year’s $302.79. However, last week’s price was well above the 2018-2022 average of $239.68 per cwt.
If Southern Plains fed steer prices follow last year’s trend, they will remain firm into November and then drift lower into the last week of December.
But market analysts have predicted support for fed cattle prices late in the fourth quarter or in the first quarter of 2025 as supplies tighten in conjunction with the bottom of the cattle cycle.
UNEVEN GAINS
But while boxed beef prices tend to gain in the last quarter of the year, fed steer prices typically do not. The five-year average graph of weekly Southern Plains fed steer prices shows a general sideways movement with near-steady valleys and declining peaks going through the end of the year.
And that’s not the result of increased fed cattle slaughter. There is a slight year-end gain in federally inspected cattle slaughter, but it’s not large enough, or soon enough, to pressure fed cattle prices.
The 2018-2022 average shows a slaughter peak in November just ahead of the Thanksgiving Day holiday and another the first week of December. The season has a noticeable demand push for rib roasts and steaks as well as other steaks, so packers tend to try increasing weekly slaughter rates around the Thanksgiving Day holiday.
Cattle slaughter drops sharply through December and doesn’t pick up again until after the New Year’s holiday.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $182.95 per cwt to $185.36, compared with last week’s range of $181.00 to $183.70 per cwt. FOB dressed steers, and heifers went for $286.11 per cwt to $288.34, compared with $284.25 to $290.12.
The USDA choice cutout Tuesday was up $0.08 per cwt at $301.89 while select was down $0.92 at $286.87. The choice/select spread widened to $15.02 from $14.02 with 119 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $367.88 per cwt, and 50% beef was $87.50.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.33 to $1.45 a bushel over the Dec corn contract, which settled at $4.11 3/4 a bushel, down $0.01 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $244.02 per cwt, up $0.52. This compares with Tuesday’s Sep contract settlement of $244.95, down $0.15, and Oct’s $245.80, up $1.32.