Retail Choice beef prices in June were down 1.3 percent from May 2009 and down 0.4 percent from June of 2008. However, the average retail beef price for January-June at $4.313 per pound was up 2.7 percent from a year earlier.
Only the processor and retailer benefitted from these higher prices. The retailer-processor margin for January-June was up 11.8 percent; the packers' margin was down 5.4 percent; and fed cattle prices were down 9.3 percent from 12 months earlier.
The major problem in this financial squeeze for cattle producers is not price but corn prices. The good growing weather across much of the Cornbelt and the second largest acreage planted to corn in over 60 years is good news for the cattle industry. However, even though corn and meal prices this next year are likely to be substantially below a year earlier, the odds do not favor going back to $2.00 corn and $180-200 soybean meal. Therefore, we have to reduce the cow herd more than we have so far to get production and cost back in line with cattle prices.
The trade estimates for the Cattle on Feed report for July 1 to be released Friday afternoon is for the on feed number to be down 4.8 percent, cattle placed on feed during June to be down 7.1 percent and fed marketings during June to be down 0.6 percent from a year earlier.
Trade estimates for the July 1 cattle inventory show the total herd down 1.7 percent, total cows and heifers that have calved down 1.8 percent and the calf crop for 2009 down 1.5 percent.
Feeder cattle and calf prices at Oklahoma City this week were steady with a week earlier.
The price range by weight groups for medium- and large-frame Number One steers at Oklahoma City this week were: 450-500 pounds $110-114.50 per cwt, 500-600 pounds $103.50-112.50 per cwt, 600-700-pound calves $94.25-106 per cwt, 600-700-pound yearlings $103.75-109 per cwt, 700-800 pounds $100-104.50 per cwt and 800-1,000 pounds $92.50-102.50 per cwt.
Boneless cuts of beef in cold storage at the end of June were up three percent from last year. Beef cuts in cold storage on June 30 were down nine percent from 12 months earlier.
Wholesale beef prices Friday morning showed Choice beef at $142.89 per cwt, up $6.42 per cwt from a week earlier. Select beef at $136.71 per cwt was up $6.13 per cwt from seven days earlier.
The weighted average live fed cattle price for the week through Thursday at $53.38 per cwt was up $0.38 per cwt from a week earlier. The weighted average negotiated carcass price for the five-market area through Thursday at $129.44 per cwt was up $0.06 per cwt from seven days earlier.
Slaughter this week under Federal Inspection at 615 thousand head was down 7.5 percent from last year.
The Cattle on Feed report for July 1 came in a little more positive than the trade estimates. The number on feed was down 5.3 percent while the trade estimate was for a 4.8 percent decline. The number placed on feed during June was down 8.4 percent while the trade estimate was for a decline of 2.1 percent. Fed marketings during June were up 0.6 percent from a year earlier while the trade estimate was for a decline of 0.6 percent.
The futures market on Monday will likely be steady to a little higher than the close on Friday.
There were no big surprises in the July 1 inventory numbers. Total cattle and calves on farms and ranches were down 1.5 percent while the trade estimate was for a 1.7 percent decline. The total number of cows and heifers that have calves was down 1.4 percent, and the trade estimate was for a 1.4 percent decline. The estimated calf crop for 2009 was down 1.4 percent while the trade estimate was for a 1.5 percent decline.