USDA's February WASDE increased their forecast of slaughter steer prices in 2014 by $2.50/cwt. They now expect the 5 area average for slaughter steers this year will be between $132/cwt and $140/cwt. USDA is predicting 2014 beef production will be down 5.3% from last year.
USDA released their long term forecast this week. It has beef production decreasing in 2014, 2015 and 2016 and then increasing each year through 2023, which is the end of their forecast range. Over the coming decade, USDA predicts live slaughter steer prices will increase from the low $130s this year to the mid $150s in 2023.
By 2023, USDA expects U.S. beef production to only be 1.1% greater than last year. They are predicting 2023 beef exports will be up 38.8% from 2013 and 2023 pork imports will be up 29.3% compared to 2013. USDA expects U.S. per capita beef consumption to stabilize around 50-52 pounds of retail weight per year.
Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $141.99/cwt, up $1.43 from a week ago and up $19.18 from a year ago. Steer sales on a dressed basis averaged $223.00/cwt this week, down $2.35 from a week ago, but up $27.14 from year ago.
This morning, the boxed beef cutout value for choice carcasses was $207.23/cwt, down $5.02 from the previous Friday, but up $24.40 from a year ago. The select carcass cutout is $207.30/cwt, down $2.66 for the week, but up $26.59 from last year. It rarely happens, but this morning the select cutout was 7 cents above the choice cutout.
This week's cattle slaughter totaled 539,000 head, down 3.9% from last week and down 9.6% from the corresponding week last year. The average steer dressed weight for the week ending on February 1 was 874 pounds, up 1 pound from the week before and up $2 pounds from a year earlier.
Feeder cattle prices at this week's Oklahoma City auction were steady in light volume due to extremely cold weather. This week's prices for medium and large frame #1 steers by weight were: 400-450# $217-$236, 450-500# $214-$221, 500-550# $199-$216, 550-600# $183-$200, 600-650# $172-$180, 650-700# $172-$178, 700-750# $162-$174.50, 750-800# $163.25-$167.50, 800-900# $155.50-$162.25, and 900-1000# $152.75-$158/cwt.
The February live cattle futures contract closed at $142.60/cwt today, up $1.40 from last week's close. April fed cattle settled at $141.10, up 70 cents for the week. June settled at $132.30/cwt, up 20 cents.
The March feeder cattle futures contract ended the week at $170.47/cwt, up $2.67 for the week. May feeders closed at $171.77/cwt, up $2.57 from the previous Friday. August feeder cattle futures settled at $173.45/cwt.
The March corn futures contract gained a penny this week to end at $4.4525/bushel.