Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel offers an update of his observations on the cattle market for the current month of September.
"Feeder cattle prices in Oklahoma are currently about 10 percent higher than this time last year. Calf and feeder prices peaked in June, a later than 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, I don’t expect a repeat of last year’s October crash in cattle prices.
"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 currently about five percent lower 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 the year. 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 year.
"Beef production is expected to be up 4.0 - 4.5 percent year over year in 2017. Fourth quarter beef production will continue higher year over year but by a smaller amount than previous quarters. Higher beef production in 2017 is due to increased cattle slaughter with an expected annual slaughter total up 5.0 to 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 three 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.
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