by David Anderson, Texas A&M University

Pop as in a champagne cork, not a balloon! There have certainly been some fluctuations in prices, especially in the futures market, during the last couple of weeks due to tariff announcements and recession fears, but cash fed-cattle prices have rebounded quickly.

Five-market weighted average (price weighted across all grades) fed-steer live prices averaged $205.19 per hundredweight (cwt.) April 8, bringing the average price for that week down to $207.70. Price quickly rebounded to more than $212 per cwt. Fed-cattle prices had averaged more than $211 per cwt. for the three weeks prior to the tariff announcements. The fluctuations in the fed-cattle market highlight the volatility in the market compared to some underlying fundamental conditions.

Calf and feeder-cattle markets experienced similar price declines during that week. Using Oklahoma auctions as an example, 500-600-pound (lb.) steers declined $11 per cwt. to $369.71 for the week of April 11. They rebounded to $376 per cwt. for the ensuing week. Feeder steers weighing 700-800 lb. dropped $10 to $289 before bouncing back to more than $300 per cwt.

During the last few weeks, the cutout has shown some ups and downs that appear to be more reflective of the beginning of grilling season purchasing. The Prime-Choice cutout premium declined to $25 per cwt. in mid-April from more than $60 per cwt. in January. This premium was $28 per cwt. last year at this time.

Cattle and beef prices remain higher than last year, even with some volatility, while beef production remains relatively close to last year. For the year through April 26, beef production is equal to last year. But during the last month production is down 1.3% compared to last year. Using the daily slaughter data fed steer and heifer slaughter is down 2.8% in April compared to last April. Heavier weights are continuing to boost beef production.

The risk of tariffs and retaliation along with recession worries remain and will likely lead to more price volatility in coming weeks; however, fundamental factors, like fewer cattle, will continue to support high prices. High cutout values reflect a little less beef production in recent weeks but also continued positive consumer demand.

Worth watching is weekly U.S. exports of beef to China. Tariffs appear to have severely damaged exports in the early reported weekly export data. For the week of April 17, the United States exported only 186 metric tons of beef to China. That is the smallest weekly exports since March 2020 at the beginning of COVID. Exports the week before totaled 1,431 metric tons. China has been our third-largest export market for beef, following Japan and South Korea.

Editor’s note: Reprinted with permission from the Livestock Marketing Information Center, https://lmic.info. David Anderson is professor and extension specialist, livestock and food product marketing, in the Department of Agricultural Economics at Texas A&M University.

Angus Beef Bulletin EXTRA, Vol. 17, No. 5-A