Beef Bounces Back
By: Derrell S. Peel, Oklahoma State University Extension
Beef and cattle prices bounced back sharply in the past ten days. Choice boxed beef ended last week at $218.56/cwt., up $14.82cwt. from the recent low on May 6. Wholesale prices were generally higher last week for end meats (round and chuck) as well as middle meats (rib and loin). Five-market fed cattle prices ended the week of May 13 at $132.64/cwt., up $14.61/cwt. from the May 4 low. Auction prices for feeder cattle in Oklahoma were mostly up four to six percent in the past one to two weeks.
Price improvement has occurred despite continuing year over year increases in beef production. For the week ending May 14, estimated beef production was up 6.1 percent year over year, contributing to a ten week average increase of 5.3 percent compared to the same period last year. Cattle slaughter was estimated at 601 thousand head last week, up 5.8 percent year over year. Average cattle slaughter has been 4.1 percent higher than last year for the last ten weeks. Carcass weights are still up year over year but have decreased dramatically in recent weeks. Average steer carcass weights were 868 pounds last week, down 26 pounds from early March and just 3 pounds heavier than the same period last year.
The recent rally in cattle and beef prices provides a new base for seasonal price movements through the summer and the remainder of the year. Beef production is expected to increase seasonally through June but this will be tempered both by the recent acceleration in cattle marketings that is pulling cattle ahead of the seasonal peak combined with smaller year over year increases in carcass weights. Beef production will likely trend higher in the second half of the year but carcass weights may partially offset increased cattle slaughter. The recent seasonal decline in carcass weights may not be done yet and carcass weight may drop below year earlier levels for much of the second half of the year. Steer carcass weights have declined 62 pounds from the October peak last fall. This compares to an average fall to spring seasonal decrease of 41 pounds the past five years. A typical seasonal increase in carcass weights this fall from current levels would leave steer carcass weights ten to 20 pounds below the record carcass weights from the fall of 2015. This will depend on whether feedlots continue to market cattle aggressively and maintain a faster turnover rate.
