Source: Rita Jane Gabbett, MEATINGPLACE, 9/23/16


Negative psychology continues to permeate the U.S. cattle and beef industry, with both fed cattle and wholesale beef prices yet to find stability, according to USDA’s latest Livestock, Dairy and Poultry Outlook report.

The weekly Choice beef cutout was last quoted at $189.49 per hundredweight (cwt) as of the week ending Sept. 9, down $6.18/cwt from the previous reported week and $48.96/cwt lower than last year.

Aggressive steer and heifer slaughter rates, coupled with the seasonal increase in carcass weights, remain bearish for the entire beef complex. Demand is also a concern as beef prices typically weaken after Labor Day and supplies of competing meats are large.

Likewise, fed cattle and feeder cattle prices are on the decline. For the week ending Sept. 11, 2016, the 5-area weighted average steer price was $105.02/cwt. Fed steers prices are currently 21 percent below the beginning of the year and are 25 percent below 2015.

Nonetheless, there may be a silver lining on the horizon, USDA predicted. Fed cattle prices, along with beef prices, may begin to stabilize and reverse the current trend in the fourth quarter with seasonally tighter beef supplies and stronger demand for popular beef items in anticipation of the holiday season.

Retail beef prices lower
Monthly retail beef prices (Choice and Fresh) have continued to decline. The July retail Choice beef price was reported at $6.09 per pound, down 11 cents from the previous month and down approximately 28 cents per pound from July 2015.

The July all-fresh beef price was $5.75 per pound, an approximate 7 cents per pound decline from the June price and 40 cents below the previous year.

Overall domestic meat protein supplies are large, and retail pork and poultry prices are declining as well. This could result in added pressure on the beef market.

In addition to pressure from lower pork and poultry prices, expectations of increases in year-over-year beef production through the remainder of the year and into 2017 could result in annual retail beef prices that are noticeably lower than 2015 and 2014 levels, USDA predicted.

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