Larger Beef Carcasses May Hinder Product Demand

Resumption of a long-term trend in fed cattle carcass weights could have negative demand consequences for cattle feeders, said Derrell Peel, Oklahoma State University livestock marketing specialist, in a letter to Extension agents called Cow/Calf Corner.

However, multiple research studies have shown that bigger carcasses and the resulting larger cuts have some negative demand implications, Peel said.  If the trend resumes, these issues will grow, resulting in more product fabrication and alternative product marketing.




Heavier carcass weights in 2020 were expected to keep total beef production at or near record levels even as cattle slaughter decreases slightly, he said.

The latest weekly steer carcass weights were 897 pounds, down four from the prior week but up 12 from the same week a year ago, Peel said.  Heifer carcass weights in the latest weekly data were 833 pounds, up one from the previous week and up 13 from the same week last year.

Average 2019 steer carcass weights were 879 pounds, down 1.5 year over year, Peel said.  Heifer carcass weights were 813.1 pounds, down 3.4.

Monthly steer carcass weights were lower year over year for the first nine months of 2019 before moving sharply higher late in the year, he said.  Monthly weights were lower year over year for 31 of 41 months from May 2016 through September 2019.

Heifer carcass weights were lower 26 of 38 months from August 2016 through September 2019, Peel said.  However, steer and heifer carcass weights jumped sharply in November and December.




Annual steer carcass weights peaked in 2015 at 892 pounds and have averaged lower since, especially from 2017 onward, Peel said.  Heifer carcass weights peaked in 2016 at 821.5 pounds but averaged lower through 2019.

The moderation of carcass weights since 2016 raised the question of whether the long trend of higher carcass weight was over, he said.  Since 1960, steer carcass weights averaged 3.8 pounds heavier each year, increasing to 879 in 2019 from 656.3 in 1960.

Heifer carcass weights have increased an annual average of 4.5 pounds a year from to 813.1 last year from 545.6 in 1960.




Steer carcass weights have increased relative to bull carcasses so much that annual average steer carcasses in 2019 (879.0 pounds) were 1.7 pounds heavier than average bull carcasses (877.3 pounds), he said.  Over the past 50 years, bull carcasses averaged 56.8 pounds heavier than steers but the gap narrowed to just 18.3 pounds in the last decade.

Heifer carcass weights have increased faster than steer carcasses over time, closing the traditional gap, Peel said.  In the 1960s, heifer carcasses averaged 84.1% of steer carcass weights with heifers averaging 105.1 pounds lighter than steers.

In the last decade, heifer carcasses averaged 92.1% of steers weights, averaging 68.3 pounds lighter than steers, he said.




Cash cattle trading took place this week at $119 to $120 per cwt on a live basis, down $1 to up $1.  Dressed-basis trading was reported at $190 per cwt, steady to down $2.

The USDA choice cutout Thursday was down $1.07 per cwt at $204.50, while select was off $0.16 at $201.60.  The choice/select spread narrowed to $2.90 from $3.81 with 150 loads of fabricated product sold into the spot market.

No futures contracts were tendered for delivery Thursday against the Feb futures contract.

The CME Feeder Cattle index for the seven days ended Wednesday was $141.95 per cwt, up $0.85 from the previous day.  This compares with Thursday’s Mar contract settlement of $140.80, up $0.02.