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Record Prices Reflect Consumer Demand
This summer’s record cattle prices have been made possible by record consumer prices. Retail prices for choice beef were record high during July for the sixth consecutive month. The average grocery store price for a pound of choice beef in July was $5.951. That was up 3.4 cents from the month before and 62 cents higher than a year ago. The average price for a pound of fresh beef, regardless of grade, was a record $5.559 during July. That was 5.1 cents higher than the previous record, which was set the month before.
The 5 area average price of slaughter steers was a record $157.70/cwt during July, up $8.30 from the month before and up $39.10 from July 2013.
Statistics Canada’s midyear cattle inventory report indicates the Canadian cattle herd is smaller than a year ago and isn’t showing signs of herd expansion. The Canadian cattle herd was down 1.4 percent at midyear. The number of Canadian beef cows was down 1.0 percent, and dairy cow numbers were down 0.3 percent compared to July 1, 2013. The inventory of beef replacement heifers was down 3.6 percent and the number of dairy heifers being kept as herd replacements was down 0.9 percent.
Choice boxed beef cutout values are down for the third consecutive week. The cutout value for choice carcasses this morning was $250.20/cwt, down $5.84 from last Friday, but $54.26 higher than a year ago. The select cutout declined to $240.07/cwt on today’s morning report, down $10.14 for the week, but still $55.47 higher than a year earlier.
Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $152.82/cwt, down $1.92 from last week’s average, but up $29.38 compared to a year ago. The 5 area average dressed price for steers declined $1.84 for the week to $241.85/cwt.
Cattle slaughter totaled 590 thousand head this week, up 2.3 percent from the week before, but 7.2 percent fewer than the same week last year. The average dressed weight for steers slaughtered the week ending August 9 was 875 pounds, up 1 pound from the week before and 8 pounds heavier than the same week last year.
Feeder cattle prices were steady to $4 higher at this week’s Oklahoma City auction. This week’s prices for medium and large frame #1 steers by weight group were: 400-450# $306-$309, 450-500# $258-$297, 500-550# $264.50-$281, 550-600# $252-$271, 600-650# $221-$247, 650-700# $215-$236, 700-750# $214.50-$229, 750-800# $212-$224, 800-900# $205-$218.50, and 900-1000# $205.75-$209.50/cwt.
Cattle futures were mostly lower this week. The August live cattle futures contract closed at $151.85/cwt today, up $1.25 on the week. October fed cattle settled at $147.00/cwt, down 75 cents for the week. The December contract ended the week at $149.85/cwt. The August feeder cattle contract lost $1.12 this week to end at $216.10/cwt. September feeders closed at $210.90. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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