feedyard cattle

by May 30, 2024CAB Insider


Last week’s total cattle harvest was moderate at 607,000 head with this week’s holiday-shortened harvest schedule to follow. Fed cattle values have advanced in a moderate fashion over the past few weeks with last week’s six-state fed steer price at $189.92/cwt., up $2/cwt. over the prior week. Fed steers in Nebraska, Iowa and Minnesota traded for $192/cwt. while Kansas and Texas prices were at $187/cwt. late in the week.

The most recent Cattle on Feed Report, published last Friday, was very friendly to the cattle market. Cattle placed on feed during April were just 94% of a year ago following the 88% placement rate in March.

Urner Barry Report the week of May 29, 2024

The number of cattle marketed in April was 110% of the number sold in April 2023. This large disparity needs qualified with the fact that April 2023 was the second smallest marketing month of 2023 behind September.

The total “on feed” number for May 1 was 11.6 million head, just 99% of a year ago. This marks the first monthly report in 2024 where feedlot inventories slipped below 2023 levels. With the last two months of placements significantly lower than a year ago on a sharp downward trend it’s becoming clear that projections for notably smaller fed cattle supplies late in the third quarter through the fourth quarter of this year are accurate.

Beef demand was very good leading up to the Memorial Day pause in the wholesale boxed beef markets. Urner Barry’s quotes for the Certified Angus Beef® brand cutout have moved $15.73/cwt. higher in the past two weeks. This has transitioned the brand’s wholesale price back above a year ago by a margin of $2.56/cwt. in the latest report.

Quality spreads saw mixed direction last week with Urner Barry’s Choice/Select spread wider on the week at $14.40/cwt. with the CAB/Choice spread slightly narrower but quite robust at $17.82/cwt.

This week’s holiday-shortened harvest, coupled with recent advances in boxed beef prices and stronger Live Cattle futures should prove supportive to fed cattle prices. Indicators for cattle futures contracts, however, show technical signs of resistance at current levels.


Beef Month is nearing its end and with that the anticipation of spring holiday and grilling season demand begins to tarnish. Father’s Day remains a target in mid-June and spot market wholesale beef demand will likely hold up through that period. In the past 10 years (excluding the anomaly COVID year of 2020) the annual peak in comprehensive beef cutout values has, on average, been realized in the first or second week of June. The 10-year average increase in cutout value from January 1 through early June has been 10.9%. However, in the past three years the increase has averaged 19.4%.

Through last week the 2024 comprehensive cutout value has increased 10% since the first of the year. A 9% price surge in the remaining 2 ½ weeks left to match the magnitude of price increase seen in the past three years seems unlikely. Yet, this is exactly the trajectory that the market achieved in both 2021 and 2023. We must be reminded that the headline spot market values represent a very small portion of boxed beef deliveries for a given period. Therefore, concentrated buying (or lack thereof) can change weekly prices rapidly.

Comprehensive Cutout Vallue 2021-2024

A few factors are different this year, potentially impacting near term boxed beef values. First, packers remain unprofitable, therefore their weekly harvest size will not be overly robust. Weekly harvest will reflect the volume of beef they have sold ahead of time for near-term delivery plus the volume they choose to offer in the spot market. This potentially limits spot market boxed beef availability since adding speculative head count under unprofitable conditions is less attractive. Smaller supplies then may generate sharply higher prices.

Offal and 50% trim values are well below price targets for packers as well. Generation of added quantities in these categories presents more liability rather than value addition.

Total production tonnage of USDA Choice and Prime as well as the Certified Angus Beef® brand have all been record-large in recent weeks resulting from carcass weights 32 lb. heavier than a year ago. At the same time, the USDA Choice cutout in this Tuesday’s data was $311/cwt. That’s a historically high price, surpassed only in 2020 and 2021. Logically, a $300/cwt. Choice cutout floor moving into the future is a very real possibility rather than an exception, based on current supply and demand dynamics. Premiums remain stout for the traditional CAB cutout at $17.82/cwt. over Choice, down from the prior week’s $19.63/cwt. Again, at record-high tonnage for this period of the year.

Whether or not cutout values capture another 9% increase near term isn’t the deciding factor. Today’s beef market is already quite good, all factors considered.