Cattle and Beef Markets So Far in 2014
Extension livestock marketing specialists analyzes price performance for all classes of beef and cattle in the first quarter of 2014.
The first quarter of 2014 saw unprecedented prices for all classes of cattle and beef.
Retail beef prices moved sharply higher in March for both Choice and All Fresh beef. The March retail Choice price was up 6.7% compared to December levels, while the All Fresh retail price was up 6.5% compared to December. The Choice retail beef price was up 8.7% year over year, and the All Fresh retail beef price was up 9% from one year ago.
Retail beef prices did not advance as much as wholesale values in the first quarter of 2014. The Choice boxed-beef price was up 19.6% compared to December 2013 levels, while Select boxed beef was up 23.7%. Compared to one year ago, Choice boxed-beef price was 23.3% higher, and the Select boxed-beef price was up 21.5% from year-earlier levels. Boxed-beef prices have been much more volatile and have increased more than retail-beef prices so far this year. This indicates that retail margins have been squeezed and that wholesale price increases have not yet been fully passed on to retail markets.
Fed-cattle prices increased 14.4% from December to March. March average fed prices (5-Mkt) were 18.9% higher than March 2013 levels. Larger increases in boxed-beef prices compared to fed-cattle prices suggest that packer margins generally improved over the period. However, the extreme volatility in boxed prices meant that packer margins were similarly volatile. Choice boxed beef dropped to roughly $226 per hundredweight (cwt.) currently, suggesting packer margins are in the red and implying more pressure on fed-cattle prices. Reduced volume continues to plague packers. Overall steer and heifer slaughter is down 5.5% for the year to date, with steer slaughter down 3.5% and heifer slaughter down 8.6%.
700- to 800-pound (lb.) steers (Oklahoma market average) were 6.7% higher in March compared to December and were up 27% year over year from March 2013. Feedlots enjoyed better margins in the first quarter of 2014 … the best in many months. However, high feeder-cattle prices and seasonally weaker fed prices are likely to erode feedlot margins through the summer and may temper demand for feeder cattle in the second and third quarters. Developing corn market conditions could have a big impact on feeder markets.
Prices for 400- to 500-lb. steers were up 8.7% from December through March. These calf prices are up 27.5% compared to the same period last year despite lingering drought conditions in many regions that are tempering summer grazing demand.
Cull cow prices in March were up 21.6% from December and up about the same amount from one year ago. Though herd expansion plans remain tenuous in some regions due to drought conditions, beef cow slaughter is down 9.5% for the year to date, with total cow slaughter down 9.8% year over year. In the last five weeks, beef cow slaughter has been down 11.7% compared to last year. This level of cow slaughter decrease is consistent with modest herd expansion in 2014, if current beef cow slaughter rates can be maintained.
Editor’s Note: This article is reprinted with permission from the April 21, 2014, Cow-Calf Corner newsletter, which is published by the Oklahoma Cooperative Extension Service.