The ongoing wrestling match between packers and retailers – with packers trying to get higher prices – continues to pressure cattle futures. This, in turn, is beginning to weigh on auction prices.

For wholesale perspective, consider that from the first Friday in March to last Friday, Choice boxed-beef cutout values tumbled $10.66/cwt. Select boxed-beef cutout values were $7.23/cwt. lower during the same time span.

Packer efforts to increase prices by reducing slaughter levels earlier in the month – which means more days on feed – and the extraordinarily mild winter, have yielded atypical increases in carcass weights. That adds to the challenge of increasing wholesale prices.

“While we saw packers slow chain speed earlier this year to control the supply of beef, the past few weeks have seen slaughter increase once again, increasing supplies and putting downward pressure on prices,” Emmit Rawls, University of Tennessee Extension emeritus agricultural economist, said in his Friday Livestock Comments . “Along with the increased slaughter numbers, we've also seen carcass weights steadily increase over last year, which means increased beef supply and continued pressure on prices.

According to the CME Group's Daily Livestock Report, steer carcass weights have been running around 850 lbs., which is 21 lbs. greater than last year and 22 lbs. greater than the five-year average. Overall, cattle carcass weights (steers, heifers and cows) are 18 lbs. greater than last year. The writers of the report also reminded us that, "…the increase in carcass weights disproportionately increase the amount of trimmings coming to market relative to muscle cuts," which has put downward pressure on the cutout values as well.

At the same time, grass orders that began earlier than normal appear to be mostly filled.

“The mild winter and the record calf prices pulled many feeders to market earlier than normal,” analysts with the Agricultural Marketing Service (AMS) said Friday. They explain that auction receipts are running 2.4% heavier than last year, nationwide, although receipts are 3.4% less than the five-year average. They say that explains why February placements remained relatively high, even though total calf headcounts are lower (see "Cattle On Feed Higher Again").