As has been anticipated for several months, beef production is decreasing in 2023. In the last four weeks, beef production has averaged 6.4% lower compared to the same period last year. Lower beef production is the result of decreases in both cattle slaughter and carcass weights.
Steer slaughter is down 5.3% year over year in the last month and steer carcass weights have averaged 903 pounds, down 16 lbs. from one year ago. Heifer slaughter has finally begun to decrease and is down 1.6% in the past month, with heifer carcass weights at 830 lbs., down 20 lbs. year over year.
Cow slaughter is down 6.8% year over year in the last four weeks, including a 0.9% increase in dairy cow slaughter and a 13.6% year-over-year decrease in beef cow slaughter. Cow carcass weights have averaged 646 lbs. the last month, 11 lbs. lower than the same period last year. Bull slaughter is down 14.6% from one year ago. Bull carcass weights have averaged 854 lbs. in the last four weeks, down 26 lbs. compared to one year ago.
Choice boxed beef cutout values have averaged $285.13/cwt the last month, up 11% year over year. Boxed beef prices are led by higher middle meat values, with rib primals up 21.4% and loin primals up 15.5% year over year. Chuck primal values have averaged 8.5% higher with round primals up 1.3% year over year. Short plate primals are 13.5% higher with flank primals up 16.4% year over year in the last month. Only the brisket primal is down, 8.5% lower compared to last year. Select beef cutout and primal values are higher by similar amounts.
The Choice-Select spread continues to inch lower to a seasonal low. The Choice-Select spread typically reaches a seasonal low in February. The current spread of $10.39/cwt is the lowest weekly level so far this year, about a month later than the usual low and still looking for a seasonal low.
Beef production is expected to drop more sharply for the remainder of the year, adding even more supply pressure to support prices. Current estimates for 2023 have beef production decreasing in a range from 4.5-6% lower year over year. The decrease will depend, in part, on whether continued drought causes additional herd liquidation and temporarily moderates declining beef production and resulting in a smaller decrease.
The ground beef market is responding to lower beef production as well. Decreasing cow slaughter is already pushing 90% lean trimmings prices higher and decreased fed slaughter is pushing 50% lean trimmings prices higher as well. The latest Cold Storage report showed seasonally lower beef in cold storage, down 5.9% year over year, likely mostly reflecting the seasonal drawdown in beef trimmings. This contrasts with last year when cold storage inventories remained high all year due to large cow slaughter.
As the calendar turns to April, seasonal grilling demand typically adds additional support for some beef cuts and the ground beef market. Wholesale beef market values typically begin to reflect summer grilling demand in April in preparation for the Memorial Day kickoff to summer beef demand. — Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
