CATTLE OUTLOOK – Ron Plain and Scott Brown

Ag Economics, MU March 27, 2015 Retail beef prices were record high for the third consecutive month during February. The price of fresh beef in grocery stores averaged $6.028 per pound. That was 4.1 cents higher than the month before and 75.7 cents higher than in February 2014. Choice beef at retail averaged $6.27 per pound. Ground beef prices also set a new retail price record at $4.238 per pound in February. The 5 area price of slaughter steers averaged $159.90/cwt during February, down $4.50 from the month before. Record retail beef prices and declining fed cattle prices left the wholesale–retail margin at a record $2.581 per pound in February. There were 492 million pounds of beef in cold storage at the end of February. That is 20% more than a year ago and the most since April 30, 2013. A strong dollar and labor problems at west coast docks may have forced more beef into storage. This morning the choice boxed beef cutout value was $250.43/cwt, up $6.05 from the previous Friday and up $14.00 from a year ago. The select carcass cutout was $246.62/cwt this morning, up $2.06 from last week and up $16.14 from a year ago. Fed cattle prices were higher this week on light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $163.98/cwt, up $2.48 from last week’s average, up $11.72 from a year ago, and the highest for any week since early January. The 5 area average dressed price for steers was $260.00/cwt, up $4.72 for the week and up $16.52 compared to a year ago. Cattle slaughter this week totaled 531,000 head, up 2.5% from the week before, but down 9.7% from the same week last year. Year-to-date cattle slaughter is down 7.1% and year-to-date beef production is down 5.0% compared to the same period last year. The average steer dressed weight for the week ending on March 14 was 871 pounds, down 5 pounds from the week before, but up 15 pounds compared to the same week last year. Steer weights have been above year-ago each week since June 14, 2014. Feeder cattle prices at Oklahoma City were mostly $4 to $8 higher this week. Prices for medium and large frame #1 steers by weight group were: 400-450# $301-$342, 450-500# $291-$324.50, 500-550# $286-$308, 550-600# $245-$289, 600-650# $243-$271, 650-700# $227.50-$248, 700-750# $210-$229.50, 750-800# $207-$221, 800-900# $194-$211.50, and 900-1000#, $179-$203.50/cwt. The April live cattle futures contract settled at $162.70/cwt today, up $4.35 for the week. June fed cattle settled at $152.95/cwt, up $2.48 from the previous Friday. August fed cattle gained $1.90 this week to settle at $150.00/cwt. The April feeder cattle contract ended the week at $219.40/cwt, up $3.20 for the week. May feeders settled at $218.02/cwt which is $2.62 higher than the Friday before. The August contract ended the week at $219.17/cwt.