It’s possible that weekly negotiated cash fed cattle prices could top $200 per cwt this week or sometime in the next few weeks.
The USDA reported Friday that last week’s negotiated price for live steers was $198.93 per cwt, up from $194.81 a week earlier and up from $174.01 a year earlier. Live heifer prices weren’t much different at $198.84 per cwt last week, $194.00 the prior week and $173.85 a year ago.
YEAR-END BUMP
There is a strong tendency for the five-area USDA negotiated fed steer price to bump higher in the last week of the year with a variable uptrend into February.
A market analyst said that trend could be traced to consumer demand for beef, but supply related issues also play into the end result as well. This time around, consumer buying has remained strong in the face of rising retail prices.
The analyst said the resilient consumer buying interest may have been linked to somewhat inelastic holiday buying traditions, but it also could be tied to a sudden population increase from illegal aliens who get a sudden taste of a quality beef eating experience and don’t want to give it up.
PACKERS TRYING TO KEEP UP
The December USDA Cattle on Feed report indicated feedlots were current with their fed cattle marketings, yet weekly slaughter rates keep falling behind year-ago rates. For instance, last week, the USDA reported an estimated slaughter or 489,000 head, up from the previous week’s 434,000 but less than the 542,000 in the same week a year ago.
That slaughter was from cattle that averaged 1,433 pounds live weight, versus 1,431 a week earlier and 1,411 a year earlier. Dressed, those cattle yielded carcasses weighing 870 pounds, compared with 869 a week earlier and 854 a year ago.
That produced 432.2 million pounds of beef last week, up from 376.2 million the week before but down from 462.3 million the year before.
BEEF CUTOUT HOLDS STEADY UPTREND
Wholesale boxed beef prices keep following along (or are they leading?) with high fed cattle prices. A look at a graph of weekly prices for weekly choice 600- to 900-pound carcasses by the Livestock Marketing Information Center shows they made a gradual, uneven rise last year, ending at $319.58 per cwt, compared with $291.44 a year earlier and up from the 2018-2022 average of $236.03 and up from $278.86 reported for the first week of January 2024.
However, last year’s weekly boxed beef market all but missed out on the late spring-early summer rally. The equivalent rally last year peaked in early July and would have been easy to overlook.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $198.55 per cwt to $198.56, compared with last week’s range of $191.11 to $197.07 per cwt. FOB dressed steers, and heifers went for $306.40 per cwt to $312.78, compared with $301.97 to $310.00.
The USDA choice cutout Monday was up $1.86 per cwt at $327.10 while select was up $6.61 at $303.33. The choice/select spread narrowed to $23.77 from $28.52 with 119 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $324.23 per cwt, and 50% beef was $93.65.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.03 to $0.06 at $1.25 to $1.38 a bushel over the Mar corn contract, which settled at $4.57 3/4, up $0.07.
The CME Feeder Cattle Index for the seven days ended Friday was $268.63 per cwt, up $2.87. This compares with Monday’s Jan contract settlement of $266.30, up $1.47.
IN OUR OPINION
–Something to watch for: CBS News reported Monday that the Texas Parks and Wildlife Department was asking hunters and others to watch for animals that may be affected by New World Screwworms. The story gave a graphic description of what the maggots of these insects do to living flesh. The US eradicated them by 1966 using sterile females, but they could come back from the south.