Last week brought new highs to fed-cattle prices as demand for finished cattle continues to overrun supplies. USDA reports an average fed-steer price of $111 per hundredweight as of late Friday, with dressed steers averaging just under $180. The live-steer price was up from the previous week’s average of $109.68, in spite of the February Cattle on Feed report, released February 18, showing feedyard inventories up 6 percent from a year earlier and January placements up 4 percent.
Federally inspected slaughter for the week, estimated at 642,000 head, was down 1.4 percent from the previous week and up 1 percent from a year ago. Slaughter weights and dressed weights were slightly lighter than the previous week, continuing a trend toward lighter weights as the effects of this winter’s harsh weather begins to turn up in market-ready cattle. Beef production for the week, estimated at 499 million pounds, was down 1.5 percent from the previous week but up 2.7 percent from a year ago.
Wholesale beef prices also posted gains last week, with the Choice cutout averaging $169.91, up 1.3 percent from the previous week and 13.6 percent higher than a year earlier. Hide and offal prices, at $12.91 per hundredweight on a live basis, were up just slightly from the prior week but 31.7 percent higher than one year ago.
Will prices climb even higher this week? It seems unlikely, as packer margins have declined in recent weeks, averaging a negative $14.92 per head for the week ending February 19, according to our Sterling Beef Profit Tracker. But conventional wisdom last week suggested prices were due for a correction after reaching highs near $110, and the market defied expectations. So, while we might see some cooling off in fed-cattle prices in coming weeks, strong demand in domestic and export markets coupled with tight supplies should continue to support prices at historically high levels.
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