Both slaughter steer prices and beef carcass cutout values set new record highs this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $139.54/cwt, up $2.08 from a week ago and up $13.18 from a year ago. Steer sales on a dressed basis averaged a record $221.48/cwt this week, up $4.34 from last week and up $17.38 from a year ago. This morning, the boxed beef cutout value for choice carcasses was $214.61/cwt, up $12.34 from the previous Friday and up $20.39 from a year ago. The select carcass cutout is $211.48/cwt, up $14.11 for the week and up $27.67 from the same day last year.

USDA's January supply and demand report (WASDE) trimmed the size of the 2013 corn crop by 64 million bushels to 13.925 billion. They increased the number of acres harvested by 0.5 million, but reduced the average yield from 160.4 bushels per acre to 158.8 bu/ac. They are still predicting a marketing year average price close to $4.40/bu.

USDA raised their forecast of 2014 beef production by 0.5% to 24.32 billion pounds and they raised the predicted slaughter steer price by $1 to $133.50/cwt. USDA is now predicting 2014 will have 5.4% less beef, but 1.7% more pork, 3.0% more chicken, and 1.5% more turkey than in 2013. Total U.S. red meat and poultry production is expected to be up 0.2% in 2014.

Retail meat demand was up 3.2% in November with beef demand up 0.8%, pork demand up 5.9%, broiler up 2.1%, and turkey up 14.2%. Export demand for beef and pork were higher in November, but export demand for broiler and turkey meat were lower.

The U.S. economy added 74,000 jobs in December, the fewest for any month since May 2011. That is not encouraging news for domestic meat demand.

This week's cattle slaughter totaled 569,000 head, up 9.2% from last week, but down 9.1% from the corresponding week last year. The average steer dressed weight for the week ending on December 28 was 872 pounds, up 1 pound from the week before, but down 1 pound from a year earlier.

Feeder cattle prices at this week's Oklahoma City auction were $3 to $8 higher than the last sale before Christmas. This week's prices for medium and large frame #1 steers by weight were: 400-450# $227-$246, 450-500# $212-$229, 500-550# $201-$220, 550-600# $186-$203, 600-650# $170-$195, 650-700# $164-$193, 700-750# $160.50-$179, 750-800# $162-$176, 800-900# $158-$165, and 900-1000# $150-$158.25/cwt.

The February live cattle futures contract closed at $136.70/cwt today, up 40 cents from last week's close. April fed cattle settled at $136.97, up 40 cents for the week. June settled at $130.25/cwt, up 20 cents. The January feeder cattle futures contract ended the week at $168.65/cwt, up $1.03 for the week. March feeders closed at $167.65/cwt, which is 45 cents lower than the previous Friday.

Source: Ron Plain and Scott Brown