Cattle prices creeping higher

Fed cattle prices have been climbing, slowly, following the market correction that began in late July-early August. After falling from a high of $197.09/cwt. to $181.18/cwt., the 5-market weekly average has climbed back to $186.89/cwt. over the last four weeks. Prices were in the $188.00/cwt. range later during the week ending October 4th.

Normally, fed cattle prices increase, seasonally, in the fall. A 10-year seasonal fed cattle price index would suggest that prices increase about five percentage points from September to November. Of course, last year was an exception to that when prices declined during the fall. It’s not unusual for fed cattle prices to hit their high for the year in the fall, but that would require a faster pace of increase than seen, so far.

Prices continue to creep higher in the face of larger beef production and a cutout value that has been at or below last year’s level. Fed steer and heifer slaughter is 1.2% higher than last year over the last 9 weeks. Fed steer weights continue to increase and are at record highs. Federally inspected dressed weights hit 948 pounds for the week ending October 4th and are not likely at their fall peak yet. Heifer dressed weights are not quite at record highs, about two pounds away from a record. The combination of more fed cattle going to market and record high weights means that beef production has exceeded that of a year ago for the last 9 consecutive weeks. The increase in fed beef production continues to offset the decline in beef and dairy cow beef production.