Reports from last week show packers continuing to hold back on production, and their efforts might finally be having an effect on wholesale beef prices. They certainly are having an effect on feedyard carryover.

The Texas Cattle Feeders Association reports that showlists of market-ready cattle available on July 25 in the TCFA market area totaled 123,900. That compares with 88,500 head at the end of June. The TCFA report also notes that year-to-date cattle on feed numbers have been down 5 percent from last year, but federally inspected slaughter has been down 6 percent. Feedyards typically become less current at this time of year, TCFA notes, with week-to-week carryover usually peaking around mid-August. Nevertheless, the growing backlog is a concern as prices remain under pressure. Packers continue to lose money on every animal they slaughter – an average of $69 in last week’s Sterling Beef Profit Tracker – and are reluctant to step up their purchases and beef production until they see some improvement in wholesale prices.

Steer and heifer slaughter and beef production were down again last week, with USDA estimating a total of 595,000 head through Friday, compared with 626,000 head for the same period last year. Beef production was down proportionately, as slaughter weights, averaging 1,279 pounds, remain about the same as at this time last year.

TCFA reports fed steer and heifer prices averaging about $83 per hundredweight last week. USDA reports national averages just slightly higher, with steers averaging $83.40 and heifers $83.10.

Wholesale beef prices gained some ground last week, with the Choice cutout on Monday averaging $138.63 per hundredweight and finishing on Friday at $142.82 per hundredweight. The weekly average was up about $4 over the previous week.

One bright spot for cattle feeders is that corn prices continue to decline. Last week’s Omaha corn price averaged $2.96 per bushel, compared with $5.33 one year earlier. Lower cost of production have helped cattle feeders regain some profitability, with feeding margins averaging a positive $10.50 per head in last week’s Sterling Beef Profit Tracker. That trend could encourage feedyards to step up their placements, especially as they look at significant premiums in the October and December futures contracts.

For a summary of last-week’s market activity from the USDA, click here.