Old man winter continues to show his ugly hand across much of the U.S. with the start of spring still more than two weeks away.
Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, said this latest blast of winter weather caused problems for cattlemen, impacting beef distribution and consumption. He said cattle and beef markets are exhibiting volatility with disruptions in supply and demand.
Boxed beef prices increased sharply last week with Choice values up $10 per hundredweight to finish the week at $225. Fed cattle prices increased to end the week at about $150 per hundredweight.
The U.S. Department of Agriculture reports beef production for the year is down 6.9% compared to last year with total cattle slaughter down 7.5% year over year. Peel said average cattle carcasses have been 4 pounds heavier which has helped to mask some of the underlying cattle production.
For the year to date, steer slaughter is down 6.5% heifer slaughter is down 10.7% and cow slaughter is down 11%, all compared to the same period last year, according to USDA reports.
Peel said winter storms impact cattle performance in feedlots and those impacts will be evident in the market for several weeks. Additionally, later storms that occur during spring calving season have more potential for long term impacts on cattle production for many months. Winter weather takes cattle performance and production out of the system that is never recovered and further reduces beef supplies in an already declining beef production situation, he said.
Arkansas cattlemen have seen more rain this year and with decreasing feed costs, experts at the University of Arkansas expect them to rebuilt their herds at a faster rate than the nation at large. (See an Arkansas Farm Bureau video below on efforts to rebuild cattle herds in Arkansas.)
This winter has been tough for packers as they continue to run negative margins averaging losses of $81 per head last week. Profits turned into losses in February amid rising live cattle prices and tepid demand, according to Sterling Profit Tracker.