The calendar says it is summer but it really isn’t acting like it in some places and in some respects. I’m currently in Montana where the longest day of the year is impressive with sunrise shortly after 5:30 a.m. and sunset after 9:30 pm. The long days help but hay production here in the short summer season is off to a slow start with unsettled weather not allowing time for hay to be harvested without moisture damage. Back in Oklahoma, most of the state did not see the first 90 degree day until June 20 — later than usual.
The lack of summer thus far has limited seasonal beef demand. After early beef buying in April for Memorial Day, boxed beef cutout values have weakened, averaging 3.8 percent lower year over year for the last six weeks. The daily boxed beef price last Friday was down 6.2 percent from the peak price in late April.
The weakness has been most pronounced in the high value middle meats, with loin primals averaging 7.9 percent lower year over year for the last six weeks and rib primals averaging 5.5 percent lower year over year for the same period. Chuck and round primals have fared somewhat better with round primals down only 1.8 percent year over year and chuck primals up an average of 1.3 percent over the last six weeks compared to the same period last year. Both chuck and round values have showed more strength in the latest weekly data. Encouragingly, the ground beef market is showing a little life with both lean trimmings and fifty percent trimmings currently priced a bit higher compared to last year.
The upcoming Independence Day holiday will be critical for the summer beef demand season. There will likely be a lot of pent up demand for outdoor activity if the weather permits. However, the forecast for the period indicates a likelihood that large chunks of the country will continue to experience below-average temperatures. Moreover, continued flooding and swollen rivers and lakes in some regions will limit recreational activities for some time yet.
In other news, the latest cattle on feed report showed June 1 feedlot inventories at 11.74 million head, 101.6 percent of last year and a record June feedlot inventory for the data series back to 1996. The report was close to pre-report expectations and contained no surprises. May placements broke the previous three-month trend of higher year-over-year placements and were 97.2 percent of one year ago. Feedlot marketings in May were 100.7 percent of last year. For the first five months of 2019, feedlot placements have totaled 1.3 percent higher year over year and total marketings are 1.5 percent higher than the same period last year.
(Derrell Peel is a livestock marketing specialist for Oklahoma State University.)