October cattle prices were lower relative to September and the previous year. Weekly average fed cattle prices declined during the month, averaging about $100 per hundredweight compared to $131 in 2015.

However, prices in early November have averaged above $100. Medium-frame feeder steers in Oklahoma City averaged $123.50 hundredweight in October, down 8 percent from September and 35 percent from the same period the previous year.

Cutter-cow prices have also declined, with prices falling to the low $60s per hundredweight in late October.

Given the higher 2017 beef production forecast and the large amount of beef currently held in cold storage, prices are likely to remain under pressure. Beef production in 2017 is forecast to be just over 4 percent higher year-over-year compared to the previous month, when it was under 4 percent higher.

Fed cattle prices for 2017 have likewise been reduced from the previous month and are forecast to average $102 to $110 per hundredweight.

Lower cattle prices have begun to spill over into the retail price market. The retail Choice beef price in September 2016 was $5.87 per pound, about 1 percent lower than August and 6 percent lower than 2015.

Retail prices have been known to show a delayed response to changes in cattle and wholesale beef prices.

Beef imports revised downward

Third-quarter 2016 beef imports were 751 million pounds, down 16 percent from the same period the previous year. Imports for the fourth quarter were revised downward 10 million pounds from the previous month’s forecast to 635 million pounds.

Figure 1 shows monthly imports for 2015 and imports from January through September 2016. Each month’s imports for 2016 have been below those for 2015, as supplies from Australia have tightened with herd rebuilding and domestic cow slaughter has been higher.

Third-quarter 2016 exports came in at 659 million pounds, up 22 percent from the previous year. However, September export data and reported October export sales were weaker than expected and, as a result, slight downward revisions of 10 million pounds in exports to 645 million pounds were made to fourth-quarter 2016.

Figure 2 shows monthly exports for 2015 and January – September 2016. Exports are generally running above the previous year. Mexican exports in 2016 have been stronger than the previous year.

Although the depreciation of the peso continues to affect the competitiveness of U.S. beef despite declines in U.S. wholesale price declines, beef exports are still running near or above the previous year’s levels.