BOXED beef cutout values surge as panicked beef buyers rush to place last-minute orders for the September 1 Labor Day holiday. The comprehensive, Choice and Select cutouts the week before all had their largest week-to-week increases of the year, and last week saw more large daily increases. The daily Choice cutout the Friday before last (August 15) broached $400 per cwt and was at $407.86 per cwt by last Thursday afternoon. The national boxed beef comprehensive cutout (cuts, grinds and trim) the week before last averaged $379.51 per cwt, up $11.79 per cwt from the prior week. The Choice cutout averaged $380.0 per cwt, up $12.99 per cwt, while the Select cutout averaged $356.06, up $9.89 per cwt.
Formula-priced sales accounted for 62.2% of the total volume of 5940 loads, after accounting for 61.5% the week before that. Spot market sales accounted for 26.7%, forward sales accounted for 11.1% and export sales accounted for 9.5%. Boosted again by reduced slaughter levels and the Labor Day buying, the Choice cutout the first four days of last week increased by $7.29 per cwt to $407.86 per cwt and the Select cutout increased by $12.84 per cwt to $388.60 per cwt. The four-day volume however was light at 285 loads of cuts. Cutout values are expected to continue to advance this week as buying for the Labor Day holiday wraps up.
Cash Live Cattle Prices Firm Up
Cash live cattle prices were firmer the week before last and last week were likely to be steady/higher with the week before. The 5-area steer prices for the week ended August 17 averaged $242.81 per cwt live and $382.78 per cwt dressed. These were up $0.80 per cwt live and up $1.53 per cwt dressed from the prior week. The cash trade last week was again slow to develop but prices looked like being steady to higher after packer margins finally moved into the black. Tuesday saw 4733 head sell up north at $245 per cwt live or $385 per cwt dressed. Wednesday saw a more active trade up north, with prices at $244-245 per cwt live or $385-388 per cwt dressed. Just under 600 head sold in Kansas at $237 per cwt live. Thursday morning saw a light to moderate trade up north. Trade was very light down south, with Texas reporting no sales for the week.
Carcass weights in the latest reported week ended August 9 all remained above year ago levels but steer weights were down slightly on the prior week. They averaged 939 lbs, down 2 lbs but up 14 lbs on the same week last year. Heifer weights averaged 856 lbs, up 3 lbs from the week before and up 17 lbs from last year. Overall weights averaged 866 lbs, down 1 lb from the week but up 17 lbs from last year. This was the equivalent of adding 10,750 head to that week’s slaughter total, says HedgersEdge.com. The total was the smallest regular week kill of the year. Cattle continue to consistently grade a high percentage of Prime and Choice after setting a new record high of 85.35% the week ended May 10. Their combined percentage in the latest reported week ended August 9 was 84.28%. In contrast, cattle graded below 13% Select.
Meanwhile, the U.S. and the European Union reach what they call a Framework on an Agreement on Reciprocal, Fair and Balanced Trade that will boost U.S. pork exports. As part of the key terms, the U.S. will impose a 15% tariff on most EU goods. The EU intends to eliminate tariffs on all U.S. industrial goods and provide preferential market access for a wide range of U.S. agricultural goods, including pork and bison meat. Furthermore, the EU committed to work with the U.S on non-tariff barriers affecting agricultural products, including streamlining requirements for sanitary certificates for pork.
TWO FACTORS DOMINATE PLACEMENT TALK
TIGHT feeder cattle supplies and record high prices continue to dominate the feedlot placement discussion, says market analyst Mike Sands, MBS Research. Excess feedlot capacity is colliding with smaller feeder cattle supplies. A significant part of that overall tightness relates to the Mexican border closure since last fall when the border initially closed. Feeder cattle imports from Mexico are nearly 800,000 head smaller than a year earlier. In addition, there is some risk that last year’s calf crop may have been overestimated and a few more heifers likely are being diverted to the breeding herd, he says. At any rate, the large decline in feeder cattle supplies has driven feeder/fed price spreads to historical levels but has yet to materialize in smaller feedlot inventories. Still, the ultimate trend in feeder cattle supplies and subsequent feedlot placements is readily apparent and will collide with excess slaughter capacity, he says.
Although feedlot placements over the last three months were down around 8%, declines in feedlot inventories were much smaller, says Sands. Much of the apparent divergence between feedlot inventories and placements is related to the chronically slow marketing/fed cattle slaughter pace of recent weeks and months. The incentives for cattle feeders to extend days on feed and add weight is still very much in place. As a result, the marketing pace has plummeted and feedlot inventories have been supported by the building of front-end supplies. Feedlot marketings as a percent of previous placements or feedlot inventories have been historically small beginning in late spring and appear likely to persist at least through August, he says.
Because of the slow marketing pace, the number of long-day cattle on feed on September 1 may ballon to a half million head larger than a year earlier, up 20%, says Sands. Up to this point, cattle feeders have not been pressured by the building of the front-end supply. Nor have packers been pressured by record high and rising fed cattle weights. It remains to be seen whether these recent trends can or will be sustained, he says. Smaller feedlot placements in recent months suggest the potential for smaller fed cattle supplies this fall. However, the risk remains that delayed marketings will push more fed cattle from the summer months into the fall at a minimum, tempering the potential decline in fed cattle supplies. And of course, carcass weights will be heavier as well, he says.
USDA INVESTS $750M ON SCREWWORM
USDA is investing up to $750M to build the U.S.’s first domestic sterile New World screwworm (NWS) fly production facility, Agriculture Secretary Brooke Rollins on August 15 in Austin, Texas detailed the agency’s latest efforts to combat NWS, a pest that has yet to reemerge in the U.S. but is nearing the border with appearances in Central and South America as well as Mexico, with cases detected within 370 miles of the U.S. border. USDA has assessed the information on the ground in Mexico and has determined it must construct an additional sterile fly production facility in the U.S. to stop the northward advancement of this terrible pest that is threatening American cattle production, she said.
The new production facility will be based at Moore Airfield Base in Edinburg, Texas, where USDA previously announced it was investing $8.5M to create a disposal facility for sterile flies, set to be completed by the end of the year. Once the newly announced production plant is finished, it will have the capacity to produce 300M flies per week. The only current operating sterile NWS fly facility is in Pacora, Panama, where approximately 11M flies are produced per week. That facility runs at full capacity.
The U.S. previously owned a facility in Chiapas, Mexico, during the NSW outbreak in the 1960s. But it has since been closed, according to the Texas & Southwestern Cattle Raisers Assn. USDA is currently supporting the renovation of an existing fruit fly production facility in Metapa, Mexico, through a $21M investment that will provide an additional 60M to 100M sterile NWS flies. By building a sterile fly production facility domestically, USDA seeks to gain more independence from those in Panama and Mexico, it says. Several of the most prominent trade groups that represent U.S. cattle producers, including TSCRA, praised USDA’s investment but urged it to act as soon as possible to provide sterile flies.
USMEF SHOWCASES RED MEAT TO LATIN BUYERS
THE U.S. Meat Export Federation (USMEF) conducted another highly successful Latin American Product Showcase, connecting U.S. red meat exporters with dozens of prospective buyers from Central and South America. Held July 30-31 in Guatemala City, the 13th edition of the showcase featured 67 exhibitors and representatives from more than 80 USMEF member companies. With prospective buyers participating from 18 countries, total participants exceeded 500, says USMEF.
Through funding support from USDA, the National Pork Board, the Beef Checkoff Program, the Nebraska Beef Council and the Indiana Soy Alliance, USMEF’s Latin American Product Showcase has developed into a must-do event for a wide range of U.S. exporters and buyers from throughout the region, says USMEF. Attending for the first time, USMEF Chair Steve Hanson, a rancher, cattle feeder and grain farmer from southwestern Nebraska, said the showcase is a great example of the U.S. red meat industry’s effort to attract new customers and further develop emerging markets. There are buyers here who want the top of the line, then there are people wanting that mid cut and there is also a lot of demand for cuts not used in the U.S, That adds value and as a U.S. cattleman he sees it as a win-win situation, he said.
These sentiments were echoed by Kevin Rasmussen, an Iowa pork producer who serves on the National Pork Board. He also appreciated the opportunity to personally connect with international customers. A cool thing about Central America is they love some of the pork cuts that we don’t consume a lot of in the in the U.S., like the loin, he said. They’re a huge fan of the pork loin. They say it’s very versatile in their cooking experience, and they enjoy it a lot. He can’t emphasize enough how important it is to come to events like this and promote U.S. products, talk to the buyers who are here and ask them what do they want to know from a producer from north-central Iowa, he said.
U.S. ag industry leaders participating in the showcase also took part in a retail tour, visiting a range of local outlets offering U.S. pork and beef. Nebraska Beef Council member Mark Goes, who raises purebred cattle in southeastern Nebraska, appreciated the opportunity to see how U.S. red meat is merchandised in Guatemala City. We were able to visit four tiers of marketing, starting with a wet market, he said. Then we moved up three levels, touring a local grocery store, then a Walmart type of market, then a premium market. As we moved on up to the upper levels, we saw those premium cuts of beef, with USDA Choice and Prime in great demand. Select, not so much, because they’re able to get that type of product locally, he said. When we look at what’s in the meat case at Walmart and some of those higher end grocery stores in Guatemala, U.S. pork cuts are very competitive, said Rasmussen. U.S. product looks really good. The consumer in Central America is really keyed in on the quality of the product and is willing to pay for quality, he said.
Australia Has Booming Beef Exports
Meanwhile, Australia’s booming beef exports hit another all-time monthly record in July, reaching 150,435 metric tons (mt). July exports easily surpassed the previous record set a month earlier, when June volume hit 134,593 mt. July added another 15,800 mt or 11.7% to the previous record. To put July’s export activity into context, Australian beef exports had never previously exceeded 130,000 mt before October last year but have continued to surge since then, says Jon Condon of Beef Central. Last month’s record tonnage was 16% higher than July last year, which itself was an all-time record at the time. For the calendar year ended July 31, Australian beef exports to all markets reached 852,653 mt, up 121,000 mt or almost 16% on the same seven months last year. That number is all the more noteworthy because of the flooding and cyclone-related delays in production and logistics that occurred earlier this year, says Condon. The calendar year record of 1.34M mt set last year now looks well within reach. At current rates of production, it’s looking extremely likely that the 2025 calendar year will set a new record, somewhere above 1.4M mt, he says.
Exports to the U.S. last month reached 43,056 mt, up 7700 mt or 22% on the previous month, as U.S. domestic beef production continues to dwindle, says Condon. That happened despite the fact that the highest demand mid-summer grilling season in North America has now passed. Last month’s volume into the U.S. is not quite a record, however, as October exports last year shot to an incredible 47,000 mt, he says. More on Australia’s beef exports on the next page.
Grain-Fed Exports Also Set Record
Australia’s grain-fed beef exports also set another monthly record in July, reaching 42,985 mt after hitting almost 40,000 mt in June. Year to date, these exports are now at 246,249 mt, almost 35,000 mt or 16% higher than last year’s previous record. What set the July record numbers apart is that up until last month, the growth in grain-fed exports was largely responsible for recent record-setting volume, says Condon. July was different, with both grain-fed and non-grain-fed exports setting new records. Non-grain-fed exports last month reached 107,451 mt, easily beating the previous record of around 101,000 mt set in 2014 when female slaughter was record high due to drought, he says
The recent boom in export tonnage is being driven by a perfect storm, says Condon. Factors include: 70-year low cattle numbers in the U.S., which is powering demand for Australian beef not only in the U.S. but also in third countries in which product from Australia and the U.S. traditionally competes; Impacts from Trump tariffs on export suppliers like Brazil, with Brazilian beef now all but unviable in the U.S. market under an additional 50% tariff burden on top of the existing rate of 24%; Trade access issues into China for some export suppliers, especially the U.S.; Strong continued underlying demand for beef in general, says Condon.
Australia is in the box seat to capitalize on the current market dynamics, with current high levels of production, albeit blighted by the impact of drought in parts of Victoria and South Australia, says Condon. A key feature about the record-setting pace is that it is being done with far fewer cattle than it was last time records were set in 2014-15 when the processing industry was at full pace due to drought liquidation. Clearly heavier carcass weights and more grain feeding are more than offsetting larger slaughter numbers seen a decade ago. A key feature about the current record export trend is that it is not dependent on any one particular customer but rather, substantial growth in all four largest customers (the U.S. Japan, South Korea and China), as well as progress in smaller customers like Indonesia and Canada, says Condon.
NZ’S BEEF CATTLE TOTAL RISES 4.4%
NEW Zealand’s beef cattle numbers rose 4.4% in the year to June 30. Farmers in some areas rebuilt their herds following drought in the South Island last year and Cyclone Gabrielle in the North Island in 2023, says Beef+Lamb New Zealand (B+LNZ). This recovery has been supported by strong continued prices for beef and a turnaround in sheep prices in the last nine months. New Zealand’s total sheep numbers fell modestly by 1.0% to June 30, compared to the more significant reductions in recent years. B+LNZ continues to see a shift towards more beef cattle within sheep and beef farming systems as cattle prices have been more consistently high over the last couple of years, it says.
Beef cattle numbers increased 4.4% to 3.84M head as strong farm-gate prices provided farmers an incentive to shift focus towards trading cattle, says B+LNZ. Breeding cow numbers increased and surveyed farmers noted a rebuild in their herd and planning for future supply. The number of beef calves born in the spring is expected to increase 2.8% to an estimated 871,000 head due to more breeding cows and good conception rates.
The annual Stock Number Survey highlights ongoing land-use changes, with forestry conversion and carbon plantings displacing pastoral land and reshaping rural communities, says B+LNZ. Farmers responded to economic signals, with some shifting towards beef cattle due to low wool prices, reduced labor requirements and strong beef farm-gate prices. This was despite the recent uptick in farm-gate prices for sheep. Despite climatic challenges in some regions, farmer sentiment has improved, buoyed by better farm-gate prices and a pause in regulatory pressure. But on-going land-use change into forestry remains a challenge. Stock numbers would likely have rebounded further without this continued drag, which reduces the grazable area and future potential export earnings, says M+LNZ.