Beef cow slaughter is 6.4 percent below year ago levels through the first two months of 2014. This decline combined with cattle on feed inventories that have trailed year ago levels for nineteen consecutive months are producing the tight beef supplies that analysts have been expecting for quite some time. Commercial beef production in February posted the lowest absolute level since February 2005 and the lowest per slaughter day average since March 2005.
In February the choice retail beef price increased by 23 cents to $5.58 per pound. That was the largest monthly jump since November 2003. Relative to the 2007 annual average, choice retail beef was 34 percent more expensive in February, compared to a 30 percent gain for pork during that period and 18 percent for chicken.
Boxed beef cutout values were mixed for the week, with the choice cutout gaining $0.20 to $240.83/cwt on Friday morning, while the select cutout lost $1.84 for the week to $234.95/cwt. At $5.88/cwt the choice-select spread has widened in recent weeks after being near zero in early February.
Fed cattle prices strengthened again this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $150.10/cwt, up $2.18 from last week and up $25.33/cwt from the same week last year. Steer prices on a dressed basis averaged $240.11/cwt this week, up 31 cents from a week ago and up $42.40 from a year ago.
This week's cattle slaughter totaled 575,000 head, up 11,000 head from last week, but down 29,000 head from a year ago. The average steer dressed weight for the week ending on March 8 was 858 pounds, down 5 pounds from last week and down 2 pounds from last year.
Oklahoma City feeder cattle prices were $1-3 higher this week for lighter animals, with cattle over 800 pounds steady to $1 higher. Prices for medium and large frame #1 steers were as follows: 400-450# $226-$233, 450-500# $214-$230, 500-550# $215-$230, 550-600# $205-$229, 600-650# $180-$213, 650-700# $176-$196, 700-750# $174-$181, 750-800# $166-$178.50, 800-900# $157-$168.25, and 900-1000# $152-$160.25/cwt.
The April live cattle futures contract closed at $144.12/cwt today, down $1.13 from last week's close. The June fed cattle contract declined $1.65 from last Friday to settle at $136.20/cwt. August ended the week at $133.47/cwt.
April feeder cattle futures settled at $175.52/cwt, down $1.70 for the week. The May contract lost $1.45 from last Friday to close at $176.85/cwt. August settled at $178.22/cwt.