Cattle and calf prices, futures markets and cutout prices provide many great topics for discussion. It just so happens that in today’s volatile market large amounts of beef (and pork and poultry) are available.
With just two days left in the first quarter of 2020, fed steer and heifer slaughter was up 5.4 percent over last year. Cow and bull slaughter was up 4.5 percent over last year. Steer dressed weights were 22.5 pounds greater than in the first quarter last year, while heifer average weights were 13.7 pounds heavier. Cow weights were up 2.6 pounds.
Saturday slaughter rates have jumped dramatically as packers work through these large supplies of cattle offered. The last Saturday of March had an estimated 75,000 head slaughtered compared to 34,000 the same weekend the year before and only 14,000 on average over the last five years. The combination of increased slaughter and weights leaves total beef production up 6.7 percent in the first quarter (with a couple days left).
Beyond live cattle slaughtered, loads of wholesale beef are purchased and moved every day. March 16 saw 194.75 loads (7.79 million pounds) of Choice beef cuts move. That was the largest volume day since September 2011, right before 9/11. Clearly, grocery stores jumping into the market to refill their pipelines and shelves led to large beef movement. Coarse grinds on March 23—44.4 loads—were the largest movement since November 2017.
A lot more market volatility is likely to come as the effects of COVID-19 ripple through our economy. While we come to grips with all the demand implications it’s worth recognizing that it is occurring in the time of cyclically peak beef supplies.
The Markets
Fed cattle prices jumped some $10 per cwt over the previous week, as wholesale beef market demands reached into live markets. Calf and feeder markets also increased, recapturing lost ground from the week before. Cull cow prices continued to rise in many local markets.
The boxed cow-beef cutout jumped by $5 per cwt. Expectations of increasing ground beef demand as the economy struggles is pulling 90 percent lean beef prices higher. The daily Choice cutout increased about $5 per cwt from its peak at $257 as the week went on. By Friday, the Choice-Select spread stood at about $10 per cwt. — David P. Anderson, Texas A&M AgriLife Extension Service
