The average price of choice beef at retail in September was $4.425 per pound. That was up 5.1 cents from the month before and up 19.3 cents compared to September 2009. Fed cattle prices also have been strong keeping the farmer’s share of the beef dollar above year-earlier levels.
Fed cattle demand was roughly 9% higher this summer than last. The increase was entirely due to stronger export demand. Domestic beef demand is unchanged from year-ago levels.
Year-to-date cattle slaughter is up nearly 2% compared to the same period last year. Slaughter is up even though the calf crop has been below year-earlier for each of the last 10 years. We have probably pulled ahead on cattle slaughter thus far in 2010. Given the sharp run up in corn prices, the odds are good that feeder cattle will stay on pasture longer and slow throughput. This should reduce weekly beef production and keep fed cattle prices high, which is why live cattle futures have been consistently above $100 this week with the April contract approaching the all-time high for live cattle futures.
The boxed beef cutout rose this week. On Thursday afternoon the choice boxed beef carcass cutout value was $1.6061/pound, up 6.35 cents for the week. The select cutout was up 7.2 cents from the previous Friday to $1.5397 per pound.
Fed cattle prices were higher this week along with the cutout. The 5-area daily weighted average price for slaughter steers sold through Wednesday of this week on a live weight basis was $100.84/cwt, up $4.43 from a week earlier. Steers sold on a dressed weight basis this week averaged $159.07/cwt, $6.87 higher than the week before.
This week’s cattle slaughter totaled 662,000 head, up 0.5% from the previous week and up 2.6% compared to the same week last year.
Steer carcass weights averaged 859 pounds during the week ending October 9. That was up 5 pounds from the week before, but 11 pounds lighter than a year ago. This was the 46th consecutive week with steer weights below year earlier levels.
Cash bids for feeder cattle this week were mostly in the range of steady to very slightly higher. This week Oklahoma City price ranges for medium and large frame #1 steers were: 400-450# $118-$127.50, 450-500# $118.75-$124, 500-550# $114-$123.50, 550-600# $110-$117, 600-650# $110-$114.50, 650-700# $107.50-$112, 700-750# $108-$112.50, 750-800# $106-$111.50, and 800-1000# $105-$108.75/cwt.
The December fed cattle futures contract ended the week at $101.70/cwt. The February contracted closed out the week at $104.17/cwt and April settled at $106.62/cwt.
December corn futures ended the week at $5.60/bushel.