Wholesale beef prices and consumer resilience maintain their strong trends. Choice boxed beef cutout value was $1.06 higher Monday afternoon at 288.34/cwt. Select was $2.17 higher at $279.25/cwt.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were mostly $164/cwt. in all regions, which was $2 higher in the Southern Plains, $3-$4 higher in Nebraska and $2-$4 higher in the western Corn Belt. Dressed prices were $3 higher in Nebraska at $260 and $3-$5 higher in the western Corn belt at $260-$262.
The weighted average five-area direct fed steer price last week was $2.55 higher on a live basis at $163.72/cwt. The average steer price in the beef was $4.19 higher at $260.97.
Softer Corn futures helped lift Feeder Cattle futures an average of 76¢ higher on Monday (10¢ higher in spot Mar to $1.35 higher in the back contract).
Live Cattle futures closed an average of 18¢ lower, except for an average of 9¢ higher in three away contracts.
Corn futures closed mostly fractionally lower, except for 5¢ to 7¢ lower in old-crop contracts.
KC HRW Wheat closed 12¢ to 18¢ lower through May ‘24 and then 4¢ to 6¢ lower.
Soybean futures closed fractionally lower to 10¢ lower through May ’24 and then fractionally higher to 1¢ higher.
Major U.S. financial indices eased higher Monday, helped along by a slight decline in treasury yield rates.
The Dow Jones Industrial Average closed 72 points higher. The S&P 500 closed 12 points higher. The NASDAQ was up 72 points.
West Texas Intermediate Crude Oil futures (CME) closed 64¢ to 76¢ lower through the front six contracts.
Supposing drought abates in much of the country, even with prices encouraging herd rebuilding, scant beef heifer numbers suggest expansion is unlikely this year, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.
In his weekly market comments, Peel points out the current beef cow herd is the smallest in 61 years. The 5.16 million beef heifers Jan. 1 were 5.8% less year over year; they declined 5.5% the previous year. He explains beef replacement heifers represented 17.9% of the Jan. 1 beef cow herd, the smallest proportion since 2012. For perspective, Peel explains beef replacements reached a cyclical peak level of 21.0% of the beef cow herd.
“Heifers diverted from breeding to feeding contributed to the 4.0% year-over-year increase in 2021 and the 4.8% year-over-year increase in 2022 in heifer slaughter. All of which contributes to the limited number of replacement heifers available in 2023,” Peel says. “The numbers suggest that beef cow herd expansion is not possible in 2023 … More likely in 2023 is increased retention of heifer calves and breeding of yearling heifers that will fuel herd expansion beginning in 2024. If that happens, both beef cow and heifer slaughter will decrease sharply in 2023.”