Retail Beef Demand Rises In August
A stronger dollar and record beef prices are having an impact on trade. During August, U.S. beef imports were up 45.8 percent and exports were down 3.9 percent compared to 12 months earlier. More than half the increase in beef imports was due to more beef coming from Australia. The decline in beef exports was primarily due to less beef going to Canada, Egypt and Mexico. Imports equaled 12.1 percent of August beef production while beef exports equaled 11.4 percent of U.S. production.
Imports of cattle from Mexico were up 41.3 percent compared to August 2013. Cattle imports from Canada were up 19.4 percent in August.
Retail beef demand in August was up 9.4 percent compared to a year ago. Export demand for U.S. beef was up 12.4 percent in August. Retail pork demand was 2.9 percent stronger than in August 2013, while chicken demand was down 1.5 percent and retail turkey demand was 4.1 percent lower than in August 2013.
USDA has increased their forecast of 2014 beef production by 0.1 percent and raised their forecast for 2015 by 0.6 percent. The October WASDE is forecasting slaughter steers will average close to $153/cwt of live weight this year and between $149 and $162/cwt next year.
Boxed beef cutout value was sharply higher this week. The cutout value for choice carcasses this morning was $247.70/cwt, up $8.62 from last Friday. The select cutout was $235.12/cwt on today’s morning report, up $8.32 for the week.
Fed cattle prices rose this week on heavy volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $163.54/cwt, up $3.56 from last week's average. The 5 area average dressed price for steers gained $5.79 this week to $257.79/cwt.
This week’s cattle slaughter totaled 562 thousand head, down 2.6 percent from the week before and 7.7 percent lower than the same week last year. The average dressed weight for steers slaughtered the week ending September 27 was 893 pounds, up 6 pounds from the week before and 26 pounds heavier than the same week last year.
Feeder cattle prices were mostly $5 to $12 higher this week at Oklahoma City. This week’s price ranges for medium and large frame #1 steers by weight group were: 400-450# $302-$321, 450-500# $281-$317.75, 500-550# $274-$305, 550-600# $250-$289, 600-650# $224-$277.50, 650-700# $229-$262.50, 700-750# $231-$261, 750-800# $219.50-$247, 800-900# $224.50-$238.75, and 900-1000# $207-$224/cwt.
The October live cattle futures contract closed at $164.90/cwt today, up $2.50 on the week. December fed cattle settled at $165.30/cwt, down 57 cents for the week. The February contract ended the week at $165.00/cwt.
The October feeder cattle contract lost 37 cents this week to end at $240.50/cwt. November feeders closed at $239.20/cwt, down $1.77 for the week. The January feeder cattle contract ended the week at $233.10/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri