On average, slaughter weights have been 1,360 pounds, but Bevers said there are reports of slaughter weights in the 1,700-pound range.
“As a result, beef tonnage is going up with these heavier weights,” Bevers said. “We’ve got about two more weeks of these big cattle. In the long term, we will likely see things ratcheting lower.”
The calf market has reacted with lower prices. Bevers said 450-pound calves that were selling for $1,250 earlier this year are now bringing $1,000.
Bevers said fed cattle could get back to the $1.45 a pound range, but not eclipse $1.60.
“What drives these prices is how much beef production we have in this country along with how much the consumer is willing to purchase,” he said.
Recent U.S. Department of Agriculture reports suggest cattle herd rebuilding is underway. By 2016, Bevers said it is projected there will be approximately 31 million head of beef cows.
“Overall, you should prepare for lower prices,” Bevers said.
Boxed beef prices that were $265 in May are now $215 as a result of heavier weight fed cattle hitting the market and increasing tonnage, he said.
“It’s not just an increase in the numbers of cattle being slaughtered, but also because of the heavier weights,” he said.
Low gasoline prices have helped consumers continue to make beef purchases despite record-high retail prices, he said. Six months ago, ground beef prices were $5.50-$6 a pound.
“Energy prices have helped prevent consumers from turning away from beef,” Bevers said. “Cheaper gasoline has really helped with this high-priced beef environment.”
Source: AgriLife