TL;DR:
- February 2024 saw record prices for 500-pound steers in Oklahoma, with a notable increase in average prices compared to previous years.
- Despite a decrease in feeder auction volume and challenging conditions for feedlots, beef production is expected to drop by 5% year over year in 2024.
- Retail beef prices have risen, reflecting tighter cattle and beef market supply fundamentals.
In the first week of February 2024, Oklahoma witnessed a new record in calf prices, with 500-pound steers reaching an unprecedented $321.34 per hundredweight (cwt), eclipsing the former record set in November 2014. Throughout February, these calves have maintained an impressive average price of $323.64/cwt. Meanwhile, 800-pound steers have been trading at an average of $235.36/cwt, still shy of the September 2023 peak.
The agricultural sector experienced a significant correction in late 2023, particularly affecting 800-pound steer prices, which have since rebounded by approximately $19/cwt in early 2024. This year, Oklahoma’s feeder auction volumes have decreased by 14.6% compared to the previous year, indicating a shift in market dynamics.
Upcoming reports are anticipated to reveal a decrease in January placements within feedlots, despite a year-over-year increase in total feedlot numbers as of February 1. Feedlots are currently facing challenges, including overcrowded conditions and the impact of adverse weather, which have led to a slight decline in fed cattle prices and overall performance.
The January Cattle report highlighted a 4.2% decrease in estimated feeder supplies, marking the lowest level since records began in 1972. This decrease raises questions about future heifer retention rates and their impact on feedlot inventories.
Beef production is projected to fall by approximately 5% in 2024, following a 4.7% decrease in 2023 from the record highs of 2022. This reduction is attributed to fewer steers, heifers, and beef cow slaughters.
Notably, steer and heifer carcass weights have seen a decline due to earlier winter conditions, although a modest increase in carcass weights is expected this year due to lower feed costs and incentives for cattle feeders and packers to maximise beef production amidst dwindling cattle supplies.
Retail beef prices have seen a significant uptick, with choice boxed beef prices averaging $296.03/cwt over the past four weeks, nearly 10% higher than the previous year. The retail price for all-fresh beef in January stood at $7.81 per pound, up 8.5% year over year, reflecting the tightening supply fundamentals in the cattle and beef markets.
