Call the Market

Marketplace pressures have been numerous lately. Ever since the mass technical selloff in commodities earlier this month, there's been an uneasy feeling at the core of the cattle complex. Live cattle and feeder cattle prices have suffered and both feeder cattle in the countryside and cash cattle prices have weakened.

As an analyst, my job is to track and monitor the market and to share any worthwhile trends or changes I notice. I wish I could accurately predict what the market will do on any given day, but as a dear friend of mine and fellow colleague once said, "The only reason the position of a livestock market analyst was created was because someone had to make the weather man look good once in a while."

I know Americans are financially feeling the stress of our burdened and strained economy, which makes it seem odd to say beef prices are faring well overall. But I can't help but share what the data presents.

Thus far through 2024, choice cuts have averaged $306.88, which is substantially higher than years past. At this time last year, choice cuts had only averaged $298.74, year-to-date. What's even more staggering is the market's five-year average for choice cuts sits at $265.81. To really put those numbers into perspective, look at the chart associated with this column.

The other factor supporting the notion that beef demand is stronger than assumed is beef processing speeds have picked up during the last two weeks. Throughout most of 2024, chain speeds have been drastically slower than recent years as packers keenly understand managing throughput is one of the only ways to protect their margin. Thus far through 2024, chain speeds have only averaged 598,647 head/week, while in 2023 at this time weekly chain speeds were averaging 622,912 head/week.

But during the past two weeks, slaughter speeds have crept back above 600,000 head per week as packers have been noting stronger demand. Last week's slaughter was estimated at 608,000 head and the week before at 602,000 head.

I know so much is uncertain right now with our economy and with the upcoming presidential election. But I can't help but share this small piece of encouraging news. Cash cattle prices have trended lower in recent weeks, but if beef demand is indeed seeing the onset of better consumer demand, then maybe August's World Agriculture Supply and Demand Estimates (WASDE) projections aren't out line for steer prices for the third and fourth quarter of 2024 -- where steers are expected to average $193 and $190. One can only hope!

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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