Cattle Outlook
So far, the May 1 feedlot inventory is down, while April placements
were up 15%.
The May 17 Cattle on Feed report indicates the number of cattle in large feedlots at the start of May was down 3.4% from a year ago. April placements were up 15.1%, and April marketings were up 2.2% due to one extra slaughter day.
The average price of Choice beef at retail was $5.264 per pound (lb.) in April. That was down 3.6¢ cents from March, but up 27.8¢ from April 2012. The average retail price for all fresh beef was $4.853 per lb. in April, up 23¢ from a year earlier. During the last 24 months, the average price of Choice beef at retail has increased 9.2%. The average retail price for all fresh beef is also up 9.2%. This implies the demand for Choice beef is as strong as for Select and ground beef.
The five-area average price for slaughter steers in April was $127.50 per hundredweight (cwt.), up a dollar from the month before and up $6.30 from April 2012.
Corn planting is still way behind normal. As of May 12, 28% of corn acres were planted compared to 85% a year ago and a five-year average of 65% planted by May 12.
Fed-cattle prices were lower this week. Through Thursday, the five-area average price for slaughter steers sold on a liveweight basis was $124.79 per cwt., down $1.43 from last week, but up $3.36 per cwt. from the same week last year. Steer prices on a dressed basis averaged $199.76 per cwt. this week, down $2.98 from a week ago, but up $6.10 from a year ago.
The beef cutout value for Choice carcasses reached $200 per cwt. for the first time two weeks ago and continues to climb. The morning of May 17, the Choice boxed-beef carcass cutout value was $208.96 per cwt., up $3.41 from the previous Friday and up $16.45 from a year ago. The Select carcass cutout is at $192.52 per cwt., up $1.41 for the week. The Choice-Select price spread is $16.44 per cwt., the most since December.
For the week ending May 17, cattle slaughter totaled 652,000 head, up 3.3% from the week prior and up 1.2% from a year ago. The average steer dressed weight for the week ending May 4 was 839 lb., down 1 lb. from the week before, but up 7 lb. from a year ago. This was the 69th consecutive week with average steer weight above the year-earlier level.
Oklahoma City feeder-cattle prices were $2 lower to $2 higher for the week, with prices for medium and large frame No. 1 steers as follows: 400-450 lb., $168-$171; 450-500 lb., $162-$169; 500-550 lb., $150-$169; 550-600 lb., $141-$156; 600-650 lb., $139.25-$151.50; 650-700 lb., $135.50-$143.50; 700-750 lb., $130-$137; 750-800 lb., $131-$135; 800-900 lb., $119-$132.75; and 900-1,000 lb., $116-$123.25 per cwt.
The June live-cattle futures contract closed at $119.40 per cwt. May 17, down $1.15 from the prior week's close. The August fed-cattle contract lost $2.22 from May 10 to settle at $118.55 per cwt. October fed-cattle futures settled at $121.97 per cwt.
May feeder-cattle futures settled at $133.90 per cwt., down $1.47 for the week. The August contract lost $3.25 to close at $143.37.
Editor's Note: Ron Plain and Scott Brown are ag economists with the University of Missouri, which provided this article.