Cattle Outlook: Retail choice beef up 9% over past 2 years

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Today's Cattle on Feed report says the number of cattle in large feedlots at the start of May was down 3.4% from a year ago. April placements were up 15.1% and April marketings were up 2.2%, due to one extra slaughter day.

The average price of choice beef at retail was $5.264 per pound in April. That was down 3.6 cents from March, but up 27.8 cents from April 2012. The average retail price for all fresh beef was $4.853 per pound in April, up 23 cents from a year earlier. Over the last 24 months, the average price of choice beef at retail has increased 9.2%. The average retail price for all fresh beef is also up 9.2%. This implies the demand for choice beef is as strong as for select and ground beef.

The 5 area average price for slaughter steers in April was $127.50/cwt, up a dollar from the month before and up $6.30 from April 2012.

Corn planting is still way behind normal. As of May 12, 28% of corn acres were planted compared to 85% a year ago and a 5-year average of 65% planted by May 12.

Fed cattle prices were lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.79/cwt, down $1.43 from last week, but up $3.36/cwt from the same week last year. Steer prices on a dressed basis averaged $199.76/cwt this week, down $2.98 from a week ago, but up $6.10 from a year ago.

The beef cutout value for choice carcasses reached $200/cwt for the first time two weeks ago and continues to climb. This morning, the choice boxed beef carcass cutout value was $208.96/cwt, up $3.41 from the previous Friday and up $16.45 from a year ago. The select carcass cutout is at $192.52/cwt, up $1.41 for the week. The choice-select price spread is $16.44/cwt, the most since December.

This week's cattle slaughter totaled 652,000 head, up 3.3% from last week and up 1.2% from a year ago. The average steer dressed weight for the week ending on May 4 was 839 pounds, down 1 pound from the week before, but up 7 pounds from a year ago. This was the 69th consecutive week with average steer weight above the year-earlier level.

Oklahoma City feeder cattle prices were $2 lower to $2 higher this week with prices for medium and large frame #1 steers: 400-450# $168-$171, 450-500# $162-$169, 500-550# $150-$169, 550-600# $141-$156, 600-650# $139.25-$151.50, 650-700# $135.50-$143.50, 700-750# $130-$137, 750-800# $131-$135, 800-900# $119-$132.75, and 900-1000# $116-$123.25/cwt.

The June live cattle futures contract closed at $119.40/cwt today, down $1.15 from last week's close. The August fed cattle contract lost $2.22 from last Friday to settle at $118.55/cwt. October fed cattle futures settled at $121.97/cwt.

May feeder cattle futures settled at $133.90/cwt, down $1.47 for the week. The August contract lost $3.25 to close at $143.37.

Source: Ron Plain and Scott Brown

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