Seasonality in the fed cattle market cannot be denied. Even in a market where exceptional beef demand, both here and abroad, has been a dominant factor, the seasonal summer doldrums are looming.
Yet, while cash prices for fed cattle have declined, the marked firmed up for the week ending June 2, with cash sales steady and cash volume higher.
The question, of course, is whether or not we still have room to go lower, given the large supplies of fed cattle that packers need to work through the next few months. Time will tell.
But for the moment, the volume of cattle moving through the plants is substantial. The Five Area total cash steer and heifer volume was 87,496 head, compared with about 46,278 head the previous week. The Five Area formula sales volume totaled 204,712 head, compared with about 224,307 the previous week. The national cash sales this week include only about 9,800 head of 15- to 30-day delivery, so most of the cash sales will be available immediately.
The estimated weekly total federally inspected cattle harvest was 582,000 head, compared to 563,000 head the same week last year. The current year-to-date total is about 395,000 head higher than last year.
Now looking at the prices, the weekly weighted average cash steer price for the Five Area region was $110.55 per cwt, compared with $110.06 the previous week, which was 49 cents higher for the week.
The weighted average cash dressed steer price for the Five Area region was $177.35 per cwt, compared with $178.33 the previous week, 98 cents lower.
The Five Area weighted average formula price was $184.12 per cwt, compared with $192.07 the previous week, making it $7.95 lower.
The latest average national steer carcass weight for week ending May 19 was 846 pounds, which is 2 pounds lower than the previous week. But that compares with 836 pounds the same week last year. So we’re 10 pounds heavier right now and we’ve seen many weeks up to 20 pounds higher than last year.
While 10 to 20 pounds doesn’t sound like much, when you add it to the total steer numbers it represents the same as roughly 4,500-7,000 more 800-pound carcasses every week along with the heifer increases. The latest USDA meat production report for June 1 shows year-to-date that we’re 384 million pounds of beef higher than last year when you add the increased carcass weights and bigger harvest numbers.
The Choice-Select spread was $22.73 on Friday, compared with $22.81 the previous week, and that compares with a $27.18 spread last year. Last year this spread jumped to $30 dollars in mid-June.