Domestic beef demand during July was up 1.8% compared to a year earlier, but export demand for U.S. beef was down 14.9%. Export demand has declined each month this year. Why? Record beef prices may have something to do with the decline. Slaughter steer demand was down 3.2% in July. August demand calculations have to wait until next month when August trade data are released.
Retail beef prices averaged $4.945 per pound during August. That was down 6.8 cents from July, up 7.3 cents from August 2011, and the ninth highest month ever.
The 5 area average live price for slaughter steers in August was $120.30/cwt, up $4.70 from July, and up $6.70 from August 2011.
The beef packer gross margin dropped to $119 last week, the lowest in five weeks.
Beef carcass cutout values were higher this week. On Friday morning, the choice boxed beef carcass cutout value was $193.88/cwt, up $2.44 from last Friday and up $10.10 from a year ago. This week the select carcass cutout was up $3.40 from the previous week to $184.19/cwt.
Fed cattle prices were slightly lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $125.29/cwt, down 62 cents from last week, but up $9.42 from the same week last year. Steer prices on a dressed basis averaged $195.02/cwt this week, down 39 cents from a week ago, but up $11.91 from a year ago.
Cattle slaughter totaled 623,000 head this week, down 3.7% from the week before and down 5.9% from the same week last year. The average steer dressed weight for the week ending September 8 was 870 pounds, up 5 pounds from the week before and up 15 pounds from a year ago. This was the 35th consecutive week above year-earlier.
Oklahoma City feeder cattle prices were called steady to $3 higher this week with prices for medium and large frame #1 steers: 400-450# $183-$199, 450-500# $164.50-$177.50, 500-550# $152.25-$177, 550-600# $148-$158.50, 600-650# $143-$154, 650-700# $141-$156.75, 700-750# $142-$150.50, 750-800# $135.50-$142.50, 800-900# $128-$141, and 900-1000# $127-$132/cwt.
The October live cattle futures contract settled at $125.52/cwt, down $1.53 from the previous Friday. December cattle closed at $128.47/cwt, down $1.45 from the previous Friday. February fed cattle contracts settled at $131.92/cwt.
September feeder cattle futures ended the week at $143.80/cwt, $1.20 lower than last Friday. October feeder cattle contracts ended the week at $147.22, up 60 cents from the week before. November feeders settled at $148.70/cwt.
Source: Ron Plain and Scott Brown