Cattle Outlook Ron Plain and Scott Brown Ag Economics, MU June 17, 2016

Cattle Outlook

Ron Plain and Scott Brown

Ag Economics, MU

June 17, 2016

The average retail price for choice beef in May was $6.081 per pound. That was down 2.4 cents from April and down 33.1 cents compared to May 2015. The average price for all fresh beef in grocery stores during May was $5.838 per pound.

The record cattle prices in 2014 and 2015 had a lot to do with strong demand for ground beef. Ground beef prices average $4.298 per pound in May, down 35.5 cents from May 2015 and the lowest since July 2014. Choice sirloin steak prices in grocery stores ($8.678 per pound in May) were the highest since November.

The 5 area price for slaughter steers averaged $130.20/cwt in May. That was down 60 cents from the month before, down $30.50/cwt compared to May 2015, and the lowest monthly average price since December.

The LMIC estimated cattle feeding losses at $9.15 per head for steers slaughtered in May. That was $5.76 worse than in April, but $113.09 per head better than May 2015 closeouts.

USDA weekly crop progress report said that only 8% of U.S. pastures were in poor or very poor condition as of June 12. That is the same as the week before and 1 percentage point better than a year ago.

Fed cattle prices were lower this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $121.03/cwt, down $5.78 from last week's average and down $30.26 from a year ago. The 5-area dressed steer price averaged $195.03/cwt, down $7.84 from the week before and down $45.17 from a year ago.

This morning the choice boxed beef cutout value was $222.98/cwt, down $4.00 from the previous Friday and down $27.86 from a year ago. The select carcass cutout this morning was $200.50/cwt, down $3.22 from last week and down $45.29 compared to last year. The choice-select spread, $22.48/cwt this morning, continues to be close to record high.

This week's cattle slaughter totaled 603,000 head, up 2.0% from last week and up 9.8% from a year ago. The average steer dressed weight for the week ending on June 4 was 864 pounds, up 5 pounds from the week before, but down 2 pounds from a year ago.

Feeder cattle prices at Oklahoma City this week were steady to $6 lower than last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $184-$187, 450-500# $173, 500-550# $152.50-$170.50, 550-600# $156-$160.50, 600-650# $148-$157.50, 650-700# $140-$153.50, 700-750# $131-$151.75, 750-800# $130.50-$149.50, 800-900# $131.50-$147 and 900-1000# $125.25-$137.75/cwt.

The June live cattle futures contract settled at $117.27/cwt today, down $5.18 for the week. August fed cattle settled at $113.35/cwt, down $4.00 from the previous Friday. October ended the week at $113.30/cwt. August feeder cattle futures ended the week at $137.42/cwt, down $8.13 from a week earlier. October feeder cattle closed the week down $7.17 at $135.45/cwt