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Strong Meat Prices Fueled By Demand
Strong meat demand is a big factor in this year’s record cattle and beef prices. Domestic meat demand was up 4.6 percent in May compared to a year earlier. On average, domestic demand for red meat and poultry has been up 3.0 percent over the last 12 months. May domestic demand for beef was up 6.7 percent compared to May 2013. On average, over the last 12 months beef demand was up 1.5 percent. Export demand for U.S. beef was up 7.5 percent in May compared to a year ago. The average for the last 12 months is up 11.8 percent.
USDA said this week that 16 percent of U.S. pastures were in poor or very poor condition on July 13. That is the same as the week before and down from 28 percent poor or very poor a year ago. Record feeder cattle prices and good pasture conditions are causing producers to increase the size of the cow herd. During the first half of the year, cow and heifer slaughter was down 6.7 percent while steer and bull slaughter was down only 1.7 percent.
Boxed beef cutout values steadily declined this week from last week’s record highs. This morning, the boxed beef cutout value for choice carcasses was $248.32/cwt, down $2.97 from last Friday, but up $58.81 from a year ago. The select cutout was $242.27/cwt on today’s morning report, down $2.39 from last week, but up $57.95 from a year earlier.
Fed cattle prices held steady this week on heavy volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $156.02/cwt, up 3 cents from last week’s average and up $35.31 from a year ago. The 5 area average dressed price for steers was $246.54/cwt, down 68 cents from a week earlier, but up $55.54 from the same week last year.
Cattle slaughter totaled 577 thousand head this week. That was up 0.2 percent from the week before, but down 11.6 percent from the same week last year.
The average dressed weight for steers slaughtered the week ending on July 5 was 861 pounds, up 4 pounds from the week before and 1 pound heavier than the same week last year.
Feeder cattle prices at this week’s Oklahoma City auction were steady to $4 lower than the week before. This week’s prices for medium and large frame #1 steers by weight were: 400-450# $279.50-$283.50, 450-500# #261-$278, 500-550# $239-$270, 550-600# $230-$246, 600-650# $223.50-$247.50, 650-700# $212-$229.50, 700-750# $215-$222.75, 750-800# $208-$219.50, 800-900# $205.50-$212, and 900-1000# $191.50-$198/cwt.
The August live cattle futures contract closed at $151.62/cwt today, up $2.50 from last week’s close. October fed cattle settled at $154.32/cwt, up $2.67 for the week. The December contract ended the week at $154.55/cwt. February settled at $153.77/cwt.
The August feeder cattle contract gained $1.28 this week to end at $211.65/cwt. September feeders settled at $212.30/cwt today, up 68 cents from the previous Friday. The October contract ended the week at $212.55/cwt, up 1.10 for the week. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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