Something is causing the spread between Choice and Select beef to be sharply lower this year than in 2006

Note in the table that the spread for the last six months has been 54.4 percent narrower than in 2006. This is a surprise because with more distillers grain being used, cattle do not grade quite as well and with higher priced corn, feeders tend to feed to lighter weights. For January-July, steer carcass weights were seven pounds lighter this year than in 2006. However, for some reason a higher percentage of cattle are grading Choice this year than 12 months earlier. It appears to be both supply of Choice beef, but also demand contributing to the change.

The cattle industry received good news Wednesday when the USDA estimated of the 2007 corn crop showed a two percent increase from the August estimate. The September estimate is for a crop of 13.3 billion bushels. The September estimate of yield per acre is 155.8 bushels, up from 152.8 in August.

Feed prices for the next 12 months are likely to be close to the past 12 months. Corn prices cannot get too much lower or too many acres will be shifted to soybeans. In fact, we are concerned that soybean prices will be high enough in the coming year to contribute to several acres being shifted to beans from corn next year, which would set the stage for higher corn in 2008-2009.

Fed cattle prices live this Friday morning at $91.40 per cwt for the five-market area were down $2.10 per cwt from a week earlier. Weighted average carcass prices for the five-market area were down $2.35 per cwt at $144.90 per cwt through Thursday.

Wholesale beef prices Friday morning showed Choice beef at $145.68 per cwt, down $2.10 per cwt from a week earlier. Select beef prices were down $3.17 per cwt from seven days earlier at $138.88 per cwt.

Feeder cattle prices were mostly steady with two weeks earlier at Oklahoma City this week but compared to other recent auctions in the Oklahoma City area feeder cattle this week looked $1-3 per cwt lower.

The prices by weight groups for medium and large frame number one steers this week were: 400-500 pounds $126-138 per cwt, 500-600 pounds $117.25-126.25, 600-650-pound calves $114-119, 700-750-pound calves $111-115 per cwt, 600-700-pound yearlings $120.50-126 per cwt, 700-800 pounds $117-123 per cwt and 800-950 pounds $112-118.25 per cwt.

Slaughter this week under Federal inspection was estimated at 643 thousand head, down 3.6 percent from 12 months earlier.

TheCattleSite News Desk