The cattle and beef market momentum on the finish of 2022 has carried over into the primary week of the brand new yr. The brand new yr appears to be like to distinction with final yr with noticeably tighter cattle numbers, particularly on the feedlot degree, pushed by earlier herd liquidation and sharply decrease feeder cattle provides.
The value of 500-pound, M/L, No. 1 steers at Oklahoma auctions averaged $227.50/cwt. the primary week of 2023, up 19.3 % yr over yr. The value of 800-pound steers averaged $180.97/cwt., up 14.7 % over the start of 2022. The Feeder Cattle futures market anticipates greater costs and tightening provide fundamentals with a $26/cwt. contract value improve from the close by January contract at about $182/cwt. to the November contract value over $209/cwt. on the present time.
The 5-market fed cattle value averaged $157.83/cwt. the primary week of January, up 14 % from one yr in the past. The Dwell Cattle futures value for February is at present just below $157/cwt. whereas the December contract is priced at $164/cwt. on the present time.
The Selection boxed beef value in early January was $283.62/cwt., up 5.8 % in comparison with the start of 2022. Beef demand in 2022 remained sturdy within the face of file beef manufacturing. Beef product markets do, nonetheless, sharply distinction between center meats and finish meats. The Rib primal leads the best way at present, up 33.8 % yr over yr, with heavy boneless Ribeye (IMPS 112A) at present priced at $1,194.03/cwt, up 47.0 % yr over yr. The Loin primal is up 9.0 % in comparison with final yr with the tenderloin (IMPS 189A), up 25.1 % yr over yr and the boneless Strip Loin (IMPS 180) up 14.2 % in comparison with one yr in the past. Sirloin tri-tip (IMPS185D), nonetheless, is at present 17.2 % beneath ranges in early January 2022. It seems that meals service (restaurant) demand is carrying a lot of the energy in beef markets in comparison with retail grocery.
Finish meat markets are doing nicely to carry regular yr over yr. The Chuck and Spherical primals are priced about equal to final yr with quite a few chuck and spherical cuts at or beneath yr in the past ranges. The Brisket primal begins 2023 down 29.7 % from yr earlier ranges. Beef demand stays a priority and can bear shut monitoring within the coming months. Quite a few macroeconomic threats persist and reducing beef manufacturing will maintain strain on to push beef costs greater. Whereas there may be scant indication of “buying and selling down” amongst beef customers so far, shifts in beef product demand are extra doubtless within the coming yr.
Drought stays the largest challenge for a lot of producers aggravated by persistently excessive feed prices. The income facet of cattle manufacturing shall be much less of a priority in 2023, not less than so far as cattle costs go. Nevertheless, managing and sustaining manufacturing and managing the rising price of manufacturing will proceed to be main challenges for cattle producers this yr.
Supply: Oklahoma State College
