Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The Market Update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA NASS and AMS reports.
The fed cattle five-area weighted average was lower last week, but that was on very limited trade. When decent trade volume developed late Friday, it was at steady to higher money but too late to be incorporated into USDA’s Friday reports.
One look at the harvest volume last week, and it is clear packers were not overly aggressive. The estimated weekly harvest of 609,000 head was 11,000 less than the previous week and 42,000 less than the same week last year. With Independence Day falling on Thursday, this week will see harvest totals closer to 500,000 head.
Cows made up 16.8% of the total last week, down from 19.9% last year. Heifers made up 30.4% of the harvest, unchanged from 2023. The lower harvest will keep the cutout strong. Last week’s cutout value averaged $323.74, a gain of $2.32.
The dog days of summer are now upon us and that typically has a negative impact on whole muscle cut demand. It will be worth watching if retailers aggressively restock beef cases after the July 4th holiday.
USDA’s acreage report provided optimism for cattle feeders. Corn acreage came in higher than expected, although weather will play a large role between now and harvest. Corn stocks are higher than a year ago as many grain farmers have been holding on to last year’s inventory hoping for higher prices. This news should support feeder cattle prices in the near term. Feeder cattle contracts at the Chicago Mercantile Exchange were trading higher heading into the holiday.
