The following article has been prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry, as well as USDA NASS and AMS reports. Edited by Mid-West Farm Report.
Beef demand peaks in June, and then typically gives way to a price slump as the hottest part of summer approaches. Fed cattle prices have cooled accordingly.
Grilling after July 4 tends to favor hot dogs, bratwurst, and hamburgers versus whole muscle cuts. Wholesale prices are still lofty but showing signs of plateauing. The cutter cow carcass and 90% lean prices have increased. The Choice-Select spread has narrowed.
The Choice beef cutout value averaged $394.19 last week, with the Select cutout averaging $382.93. The Five Area Feedlot price was $6.97/cwt lower last week with a weighted average for steers of $227.91/cwt, making it the lowest since mid-May.
Harvest numbers will likely remain lower in the weeks ahead as packers attempt to limit losses and lower cattle supplies. Last week’s estimated harvest of 560,000 was equal to the previous week but 50,000 fewer than last year. It was reported that packers have bought cattle for deferred delivery, so there is speculation that they will not be as aggressive in seeking cattle after the holiday. This may not be true for all packers, however.
Cash bids were expected to be lower, but so far have been steady with last week. Summer heat slows summer weight gain, and that could lead to lighter carcass weights as well.
USDA announced a phased reopening border with Mexico, allowing feeder cattle imports. The first port will re-open on July 7, with the last of the five reopening mid-September. This news caused Live and Feeder Cattle futures to trade lower on Tuesday.
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