With all the volatility and uncertainty still plaguing the fed cattle market, trying to predict short-term prices is nothing more than a prescription for angst and anxiety. Since there’s too much of that already, taking a longer-term view may help.
Or not. When wholesale beef prices were in the stratosphere, packers were willing to put a little more money into cash prices. Now, with plants running at near capacity and plenty of product in the pipeline, wholesale prices are in a freefall.
Beyond that, given the incredibly high number of long-fed cattle backlogged in feedyards, it will take a lot of time for the fed cattle market to reach some sort of balance. Until that happens, expect continued pressure on cash prices for fed cattle.
Looking first at volume, Five Area formula sales totaled 194,690 head for the week ending June 6, compared with about 128,000 the previous week. The Five Area total cash steer and heifer volume was 123,577 head, compared with about 98,000 head the previous week.
Nationally reported forward contract cattle harvest was about 45,000 head for the week. Nationally reported cattle sold on 15- to 30-day delivery was 15,719 head along with 7,251 head the previous week.
Now looking at prices, the Five Area weekly weighted average cash steer price for the week ending June 6 was $112.39 per cwt, which was $3.32 lower compared to the previous week. Last year the same week it was $113.76, which was about $2 lower than the previous week. The current Five Area weighted average live formula price was $120.95 for the week.
The weighted average cash dressed steer price was $179.04 per cwt, which was $4.79 lower. The Five Area weighted average formula price was $190.08, which was $2.08 higher.
The estimated weekly total federally inspected cattle harvest for the week ending June 6 was 636,000 head, which compares with 665,000 head the same week last year, so starting to get closer to last year.
The latest average national steer carcass weight for the week ending May 23 was 894 pounds, 7 pounds lower than the previous week. That compares with 842 pounds the same week last year, which was 7 pounds lower than the previous week.
Also last year, that 842 pounds was the lowest weight for the entire year, which is normal sometime during May. But what‘s happening now is far from normal. Expect carcass weights to remain record high until we clear out the backlog of long-fed, heavyweight cattle.
The Choice-Select spread was $15.06 on Friday, May 30, compared with $23.27 the previous week and that a $15.39 spread last year.