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CME: Total Fed Beef Production Modestly Up Compared to Last Year

03 September 2018

US - We have decided to talk about livestock weights, what they tell us about producer currentness and the impact they may have on the supply of beef or pork coming to market, writes Steiner Consulting Group, DLR Division, Inc.

We have included a chart familiar to regular users but differs a bit from some of the traditional weekly statistics. The following charts weekly steer weights in recent years but it also adds where we think the weights will be for the week ending 8/25 and 9/1.

The last official report from USDA on steer weights was for the week ending 8/18 (released Thursday, 30 August) and it pegged the average dressed steer carcass at 886 pounds, just 2 pounds or 0.2 per cent higher than the same week a year ago.

We think weights have continued to move higher the last two weeks (remember the USDA number is for two weeks ago) but they are still close to 2017 levels. We think the average steer weight at the end of this week will be close to 890 pounds, this is about 4 pounds heavier than two weeks ago but still in line with year ago levels.

The steer weight data suggests that feedlots remain current. Last year, higher retail features, strong forward sales and robust packer margins allowed for a high marketing rate. This kept steer weights in check through much of the fall and set the stage for very robust cattle prices going into the year-end holidays.

Marketings in September will be critical once again. Memories of 2015 and 2016 are still fresh. During the fall of those two years producers simply lost ground in terms of currentness, there were more lower yielding cattle in the mix and cattle prices struggled to gain traction.

Fed cattle weights this year have been very close to year ago so any increase in beef production has come from slaughter numbers rather than additional weight on the carcass. Using weekly data we calculate that between 1 July and 18 August, total fed beef production (steers+heifers) was 3.009 billion pounds, a relatively modest 1.5 per cent increase compared to a year ago.

Weights contributed just 0.2 per cent to this increase, the rest is accounted by higher slaughter numbers. Slaughter numbers are expected to increase into the fall, a function of higher cattle on feed. But if weights stay in check, this will tend to limit the overall increase in supply.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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