Derrell S. Peel, Oklahoma State University
The first week of February 2024, 500-pound steers (M/L #1) in Oklahoma posted a new weekly record price of $321.34/cwt., surpassing the previous high of $312.72/cwt. in November 2014. For the first three weeks of February, the price of these 500 pounds steers has averaged $323.64/cwt. For the 800 pound (M/L #1) steers, prices in February have averaged $235.36/cwt., still below the September 2023 record of $253.58/cwt., which exceed the previous high in October 2014 of $241.79/cwt. The overdone feeder market correction in late 2023 took the price of 800-pound steers to a low of $216.47 in December with the feeder price rallying back some $19/cwt. thus far in 2024. Oklahoma feeder auction volume thus far in 2024 is down 14.6 percent year over year.
The pending February Cattle on Feed is expected to show lower January placements but with a February 1 feedlot total still higher than one year ago. Feedlots are quite full in many cases and are dealing with muddy conditions and lost performance due to winter weather in December and January. The sluggish pen conditions resulted in sluggish cash fed market conditions with fed prices dropping back about a $1.00/cwt this past week to $180/cwt. As feedlots clean up pens, on-feed numbers are expected to tighten up in the coming months as the reality of limited feeder supplies becomes apparent. Estimated feeder supplies were down 4.2 percent year over year in the January Cattle report, the lowest level in data back to 1972. The key once again is the question of heifer retention. If and when heifer retention begins, feedlot inventories will drop more sharply.
Beef production is projected to decrease roughly 5 percent year over in 2024. This follows a 4.7 percent decrease in 2023 from record 2022 levels. In the first few weeks of 2024, beef production is down 4.2 percent year over year. Cattle slaughter will decrease this year with fewer steers and heifers and decreased beef cow slaughter. Thus far in 2024, steer and heifer slaughter is down 3.3 percent year over year with beef cow slaughter down 15.7 percent from last year. Steer and heifer carcass weights have dropped sharply in recent weeks as a result of earlier winter weather. Current steer carcass weights are close to year ago levels at 909 pounds, having dropped from highs of 942 pounds in late December. Although carcass weights dropped slightly on an annual basis in 2023, there is a good chance that carcass weights will increase modestly this year with cheaper cost of gain in feedlots and both cattle feeders and packers having incentives to find pounds of beef wherever they can in the face of decreasing cattle supplies.
Choice boxed beef prices the past four weeks have averaged $296.03/cwt., nearly 10 percent higher than one year ago. The January retail all-fresh beef price was $7.81/lb., up 8.5 percent year over year. Cattle and beef market supply fundamentals continue to tighten up and prices are higher for cattle and beef at all levels.
