The summer doldrums between the Independence Day and Labor Day holidays usually means slack consumer beef demand, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a newsletter called Cow-Calf Corner.
Indeed, the choice boxed beef cutout dropped from the end of June to a current weekly average of $386.75 per cwt, down from the recent high of $394.19 per cwt, Peel said.
BEEF PRICES UP FROM YEAR AGO
However, boxed beef prices remained 19.1% higher than this time last year and have averaged 12.6% higher than one year ago each week in the first half of the year, Peel said.
A graph of boxed beef cutout prices from the USDA by the Livestock Marketing Information Center in Denver showed a peak in choice 600- to 900-pound beef carcasses three weeks ago at $394.19 per cwt. This could be the annual peak in boxed beef prices since it shows a peak that is later than the 2019-2023 average of the third week in May at $312.65 per cwt.
A secondary seasonal peak occurs the last week of August at around $277.94 per cwt.
SUPPLY AND DEMAND
Higher average boxed beef prices reflect generally strong beef demand coupled with declining beef production, especially in the second quarter of the year, Peel said. Total beef production was down 1.7% year over year through the first half of the year but was down 4.8% in the second quarter.
Fed steer and heifer slaughter was down 6.3% in the second quarter leading to a 4.1% year-over-year decrease in fed beef production, he said.
Total cow slaughter continued lower, down 11.0% in the second quarter, leading to an 8.5% drop in non-fed beef production for the period, Peel said.
WHOLESALE PRICES COMPARATIVELY HIGH
Despite typical mid-summer seasonal weakness, all beef primals were priced higher than year-ago levels with the rib primal up 7.0%, loin primal up 19.3%, chuck primal up 20.2% and the round primal up 16.4%, Peel said. Brisket, short plate and flank primals also were sharply higher year over year.
Prices for lean and fatty trimmings continued to push higher with declining beef production, he said.
Cattle prices dropped in late June but bounced this past week on stronger feeder and live cattle futures prices, Peel said. Oklahoma auction feeder cattle prices were higher for all weight categories with calves up $10 to $15 per cwt and feeder cattle up $5 to $15 per cwt.
The USDA five-market fed cattle price averaged more than $235 per cwt, pushing close to the mid-June highs, he said. Average dressing boning cows averaged $165.84 per cwt.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $229.17 per cwt to $232.92, compared with last week’s range of $224.82 to $233.02 per cwt. FOB dressed steers, and heifers went for $350.68 per cwt to $370.28, compared with $354.61 to $365.41.
The USDA choice cutout Tuesday was up $0.65 per cwt at $377.72 while select was off $2.00 at $362.58. The choice/select spread widened to $15.24 from $12.49 with 132 loads of fabricated product and 15 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $419.00 per cwt, and 50% beef was $255.33.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.30 to $1.45 a bushel over the Sep corn contract, which settled at $4.01 1/4, up $0.01 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $321.10 per cwt, up $1.21. This compares with Tuesday’s Aug contract settlement of $322.27, up $2.80.