USDA has increased its forecast of U.S. beef production. They expect 2016 beef production to be 5.7% higher than last year and 2017 to be 4.4% higher than this year. They lowered the midpoint of their slaughter steer price forecast to around $120/cwt this year and $106/cwt next year.
The U.S. exported 214.59 million pounds of beef (carcass weight equivalent) during September. This was down 5.9% from August, but up 30% from a year ago. Most of our major foreign customers increased their purchases compared to September 2015.
September beef imports equaled 219.338 million pounds, down 16.6% from August and down 24% from September 2015. The large year-over-year decline is mostly due to a lot less beef from Australia, which is rebuilding their herd after prolonged drought. September beef exports equaled 9.8% of U.S. production and imports equaled 10.1% of production.
Fed cattle prices were lower this week on moderate sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $102.72/cwt, down $1.75 from last week's average and down $23.55 from a year ago. The 5-area dressed steer price averaged $159.00/cwt, down $3.59 from the week before and down $42.47 from a year ago.
Beef cutout value is lower this week. This morning, the choice boxed beef cutout value was $185.33/cwt, down $3.69 from the previous Friday. The select carcass cutout this morning was $167.79/cwt, down $5.96 from last week. The choice-select spread is quite large at $17.54/cwt
This week's cattle slaughter totaled 610,000 head, up 0.7% from last week and up 9.3% from a year ago. The average steer dressed weight for the week ending on October 29 was 917 pounds, up 2 pounds from the week before, down 3 pounds from a year ago, and below the year-ago level for the 26th consecutive week.
Cattle prices were mixed this week at the Oklahoma City auction. Feeder cattle prices were $1 to $3 lower and stocker steers were $2 to $5 higher than last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $136-168, 450-500# $140.50-$162, 500-550# $133.50-$144, 550-600# $123.50-$137.25, 600-650# $117-$133.50, 650-700# $118-$129.50, 700-750# $112.75-$127, 750-800# $115-$129.50, 800-900# $117-$131, and 900-1000# $119-$124.50/cwt.
Cattle futures were higher this week. The December live cattle futures contract settled at $105.60/cwt today, up $2.88 for the week. February fed cattle settled at $106.30/cwt, up $2.00 from the previous Friday. April fed cattle futures settled at $106.10/cwt, up $1.75 from the previous Friday.
Feeder cattle futures also gained ground this week. November feeder cattle futures ended the week at $125.72/cwt, up 10 cents from a week earlier. January feeder cattle gained $3.17 this week to settle at $121.02/cwt. The March contract closed the week at $117.45/cwt, up $2.13 for the week.