RON PLAIN and SCOTT BROWN
Cattle futures set new all-time highs this week. The June live cattle futures contract closed at $147.60/cwt today, up $7.48 from last week's close. August fed cattle settled at $146.62/cwt, up $5.32 for the week. The October contract ended the week at $149.85/cwt. December closed at $151.75/cwt.
Feeder cattle contracts cracked the $200 ceiling last week and moved still higher this week. The August feeder cattle contract ended the week at $208.15/cwt, up $7.62 for the week. The September feeder cattle contract settled at $208.72, up $7.85 from the previous Friday.
The June WASDE report lowered USDA's forecast of 2014 beef production by 0.6%. Their latest forecasts have 2014 beef production down 5.1% from last year, but 0.4% more than they predict for 2015. USDA expects 2014 slaughter steer prices to average between $143 and 149/cwt.
Strong meat demand is a big factor in this year's record cattle and beef prices. Domestic meat demand was up 4.1% in April compared to a year earlier. On average, domestic demand for red meat and poultry has been up 2.7% over the last 12 months. April domestic demand for beef was up 4.0% compared to April 2013. On average, over the last 12 months beef demand was up 1.1%. Export demand for U.S. beef was up 24.9% in April compared to a year ago. The average for the last 12 months is up 11.6%.
USDA said this week that 19% of U.S. pastures were in poor or very poor condition on June 8, the same as the previous week and down from 24% poor or very poor a year ago.
Fed cattle prices were sharply higher this week on good sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $149.37/cwt, up $4.24 from last week's average and up $25.16 from a year ago. The 5 area average dressed price for steers was $236.38/cwt, up $4.54 for the week and up $42.07 from the same week last year.
Beef prices were lower this week. This morning, the boxed beef cutout value for choice carcasses was $231.53/cwt, up $1.59 from the previous Friday and up $31.38 from a year ago. The select carcass cutout was $223.89/cwt, up $2.73 from last week, and up $40.34 from a year earlier.
This week's cattle slaughter totaled 605,000 head, down 1.5% from the previous week and down 6.1% from the corresponding week last year. The average dressed weight for steers slaughtered the week ending on May 31 was 844 pounds, up 1 pound from the week before, but down 6 pounds compared to the same week last year.
Feeder cattle prices at this week's Oklahoma City auction were $3 to $10 higher than the week before. This week's prices for medium and large frame #1 steers by weight were: 400-450# $256-$285, 450-500# $244-$272, 500-550# $224-$261, 550-600# $221-$245, 600-650# $209-$239, 650-700# $203.75-$219.25, 700-750# $194.50-$210, 750-800# $189-$204, 800-900# $180.50-$194.50, and 900-1000# $174-$185.25/cwt.