Feeder cattle prices in Oklahoma are about 10 percent higher right now than this time last year. Calf and feeder prices peaked in June, later than the usual seasonal peak for the calves and earlier than typical for the heavy feeders.
Calf prices will likely decline a bit more to a seasonal low in October, but are expected to remain higher year-over-year through the fourth quarter. Strong stocker demand for fall and winter grazing may limit seasonal price pressure this fall. Heavyweight feeder cattle prices typically decline seasonally through the end of the year but are also expected to remain above year-ago levels. While prices may weaken seasonally, a repeat of last year’s October crash in cattle prices is not expected.
Fed cattle prices peaked significantly higher than expected in May and remained higher year-over-year through July before dropping the past month under summer seasonal pressure. Fed cattle prices are about 5 percent lower right now than this date last year, but are expected to stabilize near current levels and increase seasonally in the fourth quarter, remaining above year-earlier levels through the end of 2017.
Boxed beef prices have dropped sharply from June highs but appear to have stabilized recently. Choice boxed beef prices are currently very close to year-ago levels, while Select boxed beef prices are slightly higher year-over-year. Boxed beef prices are expected to increase some in the fourth quarter and average higher year-over-year for the balance of the 2017.
Beef production is expected to be up 4-4.5 percent year-over-year in 2017. Fourth quarter beef production will continue higher year-over-year but by a smaller amount than in previous quarters. Higher beef production in 2017 is due to increased cattle slaughter with an expected annual slaughter total up 5-5.5 percent year-over-year.
Heifer and beef cow slaughter are both up about 11 percent year-to-date, while dairy cow slaughter has increased to a year-to-date total up 3.7 percent from one year ago. Steer slaughter is up 3.3 percent year-over-year thus far in 2017, but is expected to total less than 3 percent annual increase by the end of the year.
Increased slaughter is, however, partially offset by lower carcass weights. So far this year, steer and heifer carcass weights have averaged nearly 14 pounds less than last year. Steer and heifer carcass weights bottomed in early May and are increasing seasonally. However, steer carcass weights are still nine pounds less than this time last year, while heifer carcasses are currently four pounds lighter than one year ago.
Fed carcass weights typically peak seasonally in October or November. The extent to which carcass weights remain below year-earlier levels will be an important factor in moderating year-over-year increases in beef production in the fourth quarter.
In the face of increased beef production in 2017, cattle and beef prices have been remarkably strong. Retail prices have generally increased during the year and are at year-ago levels even though per capita retail beef consumption is expected to increase nearly 2 percent this year.
The domestic beef supply and demand balance has been helped considerably by decreased imports and increased exports of beef. For the period January through July, beef exports are up 14.5 percent while beef imports are down 4.3 percent. Global beef markets are quite volatile due to a host of U.S. and global economic and political factors, but beef trade is expected to remain a supportive factor for U.S. cattle markets. — Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
