Peel: June Heats up…and Not Just the Weather
Summer temperatures are not the only thing heating up as we move into June. Beef and cattle markets are rising in recent weeks as well. Tighter supplies of beef and cattle are dominating market fundamentals and will continue to do so.
Choice boxed beef prices finished last week at $309.93/cwt., up $6/cwt. from the Friday before Memorial Day. Boxed beef prices had previously peaked in late April but decreased through May with holiday buying completed. The increase in Choice boxed beef prices into June suggests that post-Memorial Day beef demand remains strong. With few exceptions, wholesale beef cut prices are higher year over year and the Choice boxed beef price is 14.8 percent higher than this time last year.
Beef supplies continue to tighten with beef production down year over year every week this year except one week in January. For the first 20 weeks of the year, beef production is down 4.8 percent year over year. Total cattle slaughter is down 2.8 percent so far this year compared to last year, with fed slaughter down 2.4 percent and total cow slaughter down 4.1 percent year over year. However, heifer slaughter remains 0.6 percent higher year over year for the year to date and total female (heifer plus cow) slaughter so far this year accounts for 52.4 percent of total cattle slaughter. Beef cow slaughter is down 11.2 percent thus far in 2023 but is partially offset by a 4.7 percent increase for the year to date in dairy cow slaughter. Steer carcass weights have averaged 12.8 pounds lighter year over year, while heifer carcasses are averaging 15.2 pounds lighter this year. Cow carcass weights are lighter this year by 9.8 pounds on average.
Cash fed cattle prices traded higher last week with an average live price of $181.26/cwt., including some high-grading cattle trading as high as $190/cwt. late in the week. Fed prices decreased some after the early April peaks in an apparent seasonal decline but are now moving counter-seasonally higher.
Feeder cattle prices continue a strong uptrend with prices for lightweight stocker calves advancing the most. Oklahoma auction prices for 400-pound steers, Medium/Large #1, averaged $309.70/cwt. for the week ending June 2. All steers below 925 pounds were priced over $200/cwt. Steer prices are higher year over year by over 54 percent for animals under 600 pounds and nearly 40 percent higher for those over 600 pounds. Medium/Large, #1 heifers up to 750 pounds, also brought more than $200/cwt. Slaughter cow prices ranged from $114.93/cwt. for high dressing Breaking cows to $85.30/cwt. for low dressing Lean cows. The price for average dressing Boning cows was $103.16/cwt.
Recent improvement in drought conditions increases the odds that heifer retention will begin in earnest in the second half of the year. Increased heifer retention, combined with reduced cow culling will increasingly squeeze cattle slaughter for the remainder of the year and into 2024 and beyond.
Derrell Peel, OSU Extension livestock marketing specialist, discusses recent rains and how they may impact herd rebuilding. He says though pastures are looking green in drought-stricken areas, more rain is needed for better grazing prospects on SUNUPTV from May 27, 2023. https://www.youtube.com/watch?v=loVgLh_YMDI
