Fed Steer Prices Start 2019 Near 2018

Weekly average cash prices for slaughter steers in the Southern Plains are starting the year very near 2018 levels and on much the same trend.

Data from the USDA’s Agricultural Marketing Service compiled by Denver’s Livestock Marketing Information Service showed the average price for slaughter-ready cattle in the Southern Plains last week came to $123.85 per cwt on a live basis.  This was up $3.87, or 3.23%, from $119.98 per cwt in the same week last year but was $12.40, or 9.10%, below the 2013-2017 average of $136.25.

If prices trend with the 2013-2017 average, they will remain weak through January and then begin to rise through March, dip into late April or early May and rally to the annual high in late May or early June before fading off to the annual low around Oct. 1.

Last year, cash prices followed the same general trend but hit the annual low in the last week of June at $106.22 per cwt.  A secondary low followed the last week of August at $106.92, which was more closely aligned in timing to the five-year average annual low.




Beef production forecasts by market analysts favor continued gains in production and supply side pressure to beef and cattle prices.

The latest federally inspected beef production figures showed that beef production the last two weeks of December plummeted to annual lows.  This is not unexpected given the presence of the Christmas and New Year’s holidays a week apart the last week of the year and the first week of the new year.

But from there, beef production was expected to advance above last year.  In the first normal production week of 2018, 507.1 million pounds of beef were produced, compared with 505.1 million in the 2017 week and the 2012-2016 average of 476.46 million.

After the first half of the year, beef production forecasts become more muddled but generally have a firm to higher tone given the growth of the US cattle herd over the last five years.  The herd has expanded from historic lows as major drought conditions eased and prices were favorable to producers.




Wholesale beef prices also favor price pressure on cattle, at least for the next four to five weeks.  The 2013-2017 average negotiated price for 600- to 900-pound choice boxed beef bottoms in mid-February at $206.83 per cwt.

However, from there it rallies into mid-March as buyers prepare for the advent of the seasonal grilling season.  Prices for choice boxed beef then fade into mid-April before moving up to the annual high in mid-May as grilling-season demand fades and more of the larger fed cattle come to slaughter.

This year so far, choice boxed beef prices are moving lower but are very close to last year and the previous five-year average.  It appears they could follow the trend closely.




Cash cattle traded last week at $123 to mostly $124 per cwt on a live basis, up $1 from the previous week and at $195 to mostly $197 on a dressed basis, up $1 to $2.

The USDA choice cutout Thursday was up $0.57 per cwt at $212.50, while select was up $0.70 at $207.64.  The choice/select spread narrowed to $4.86 from $4.99 with 80 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday, was $143.09 per cwt, down $1.10.  This compares with Thursday’s Jan settlement of $141.42, down $2.35.