Fed-cattle prices averaged around $82.50 last week in the live market and $131.60 dressed. Those prices were down slightly from the previous week, and remain more than 14 percent lower than those of one year ago.

While fed-cattle prices have remained flat, feeding margins have improved significantly. According to the Sterling Beef Profit Tracker, cattle feeders made about $60 per head on cattle they marketed during the week ending July 25, compared with $10 the prior week and mostly negative margins since early spring. The improvement comes as a result of lower feed prices and production costs, and lower prices paid for feeder cattle, creating more realistic breakeven prices.   Packer margins, however, remain negative, with losses averaging over $45 per head in the latest Sterling Beef Profit Tracker.

Hide and offal values have gained significant ground this summer, helping support fed-cattle values. The Texas Cattle Feeders Association notes that byproduct values hit a low of $5.63 per hundredweight in March, but have rallied 43 percent to an average $8.06 last week, adding up to a gain of $2.43 per hundredweight on a live-weight basis. Hide prices, according to TCFA, have increased by $67 percent since spring, and tallow prices have jumped 92 percent.  

Wholesale beef prices remain close to $4 higher than those of a couple weeks ago, although they lost ground through the week. The Choice cutout started the week at around $143 per hundredweight, but had dropped to an average of $141.60 by Friday. The week’s average for the Choice cutout was $142.53, up about a dollar from the prior week. The Choice-Select spread last week averaged $5.90. At this time last year, the Choice cutout was averaging about $160 and the Choice-Select spread hovered around $8.

Federally inspected beef-cattle slaughter last week, which USDA reports at 639,000 head, was up about 4 percent from the previous week but 3.5 percent lower than during the same week last year. Dressed weights were up slightly on a weekly basis, and about equal to a year ago, so resulting in beef production posting a 4.2 percent week-to-week increase.