Total federally inspected beef production was 12.1 billion lb. in the first 24 weeks of 2019, up just 0.7% from the same period last year, according to Derrell Peel, Oklahoma State University Extension livestock marketing specialist.
“That is an average production of 502.4 million lb. per week – an amazing number if you think about it,” he said. “Given that there is little storage of beef beyond pipeline supplies, it means that roughly 500 million lb. of a wide range of beef products are moving through a vast array of retail grocery, restaurant, foodservice and export markets every week. It is an enormous and complex set of markets.”
Total cattle slaughter was up 1.3% year over year in the 24 weeks ended in mid-June, Peel relayed, adding that year-to-date steer slaughter is down 2.2%, while heifer slaughter is up 7.9% compared to one year ago.
Total year-over-year yearling slaughter is up 1.3% for the year to date. The most recent weekly steer carcass weights were 849 lb., 7 lb. less than the same date last year, Peel reported, noting that steer carcass weights have averaged 4.9 lb. less for the year to date compared to one year earlier. Current heifer carcass weights are 791 lb., down 4 lb. year over year and averaging 5.8 lb. less than the first 24 weeks last year.
Peel suggested that yearling carcass weights have likely reached their seasonal low. Steer carcass weights reached a low of 842 lb. in weeks 21 and 22 this year, compared to a low of 846 lb. in week 20 of 2018. Heifers have likely bottomed at 779 lb., Peel said, which occurred in week 22 this year, compared to a seasonal low of 782 lb. in week 20 last year.
“Steer and heifer carcass weights typically increase from the recent low to a seasonal peak in the fourth quarter of the year,” he explained. In 2018, steer carcass weights peaked in November with a weight of 902 lb. in week 47. Heifer carcass weights peaked in weeks 45 and 48 at 838 Peel lb. last year.
“With feed costs destined to be somewhat higher in the second half of the year, feedlots will have some incentive to trim back days on feed, suggesting lighter finished and, thus, carcass weights. However, feedlots do this largely by placing heavier feeder cattle, which need fewer days to finish,” he said.
Heavier placement weights imply heavier finish weights, Peel explained, adding that feedlot data show that every 1 lb. increase in placement weight results in about a half-pound increase in finished weight. “Thus, the impact of higher feed prices on carcass weights is unclear but is unlikely to have a major impact,” he noted.
Assuming that carcass weights remain at or below last year’s levels for the remainder of the year, Peel expects beef production to total just more than 1% higher than year-ago levels for 2019.
“As long as beef demand does not weaken appreciably in the reminder of the year, fed cattle prices are expected to average about equal to 2018 levels for an annual average,” he said.
To finish out the year, Peel said fed prices are expected to be slightly lower year over year in the third quarter before strengthening in the fourth quarter. “Feeder prices are generally expected to average 3-5% below 2018 levels for the remainder of the year and for an annual average,” he noted.