2019 Choice Beef Production Decline Let To Tight Supplies

The decline in the percentage of choice beef carcasses produced last year, combined with lower weights and fewer steers sent to market resulted in some very tight supplies of choice beef and a wide choice/select spread through much of the last half of the year, a university economist said.

David Anderson, extension agricultural economist at Texas A&M University, made the comment in a letter to Extension agents through the Livestock Marketing Information Center called In The Cattle Markets.  In the letter, he said the retreat in the number of carcasses gracing choice for a large portion of last year was one of the more interesting trends of 2019.

Feedlot performance, weather, time on feed and finished weights all can contribute to variations in grading, Anderson said.




Weekly steer and heifer dressed weights currently are up by more than 10 pounds compared with last year, he said, and there is a little more prime and a little less select.

Prime grading is up almost half a percentage point while select is down 0.6 percentage point, he said.  On average, weekly change in choice grading is up just 0.2 percentage point.

National numbers don’t show much change from a year ago, but regional results show much more significant differences, he said.  In the second week of January, 13.9% of carcasses in Nebraska graded prime compared with 11.8% the year before.

On average this year prime carcass numbers are almost 1 percentage point more than last year, Anderson said.  Choice grading is up almost 1.5 percentage points, hitting 75.4% in January.  Select grading is down a full two percentage points this year.

More carcasses are grading prime and choice in Kansas, while fewer carcasses are grading select, he said, but the reverse in true in Texas.  Prime grading carcass numbers are down about 0.8 percentage point, averaging 3.3%.

However, about 64% of carcasses have graded choice this year, down from almost 69% last year, Anderson said.  Select carcasses are up to 30.1% from about 25% last year.

Even with a little more prime beef on the market compared with last year, the prime cutout has averaged $230.39 per cwt compared with $223.81 for the first five weeks of last year.

The prime/branded and prime/choice price spreads have averaged $12.74 and $18.50 per cwt, respectively, compared with $5.89 and $10.20 last year.

The USDA’s next Cattle on Feed report is to be published on Friday.  Early pre-report estimates included placements that range from below a year ago to as much as 3% more than last year.

Marketings were expected to be up at least 1%, based on higher steer and heifer slaughter, but more fed cattle were imported from Canada in January.

Cattle on feed were expected to remain more than 2% more than a year ago.




Cash cattle trading took place in the Plains last week at $118 to $121, mostly $119, per cwt on a live basis, steady to down $2 from the previous week.  Dressed-basis trading was at $190 to $191, down $2.

The USDA choice cutout Wednesday was down $0.56 per cwt at $205.57, while select was off $1.97 at $201.76.  The choice/select spread widened to $3.81 from $2.40 with 150 loads of fabricated product sold into the spot market.

Six heifer futures contracts were retendered for delivery Wednesday at 1, and six were reclaimed at 1.

The CME Feeder Cattle index for the seven days ended Tuesday was $141.10 per cwt, down $0.10 from the previous day.  This compares with Wednesday’s Mar contract settlement of $140.77, up $1.47.