US beef demand is holding up pretty well so far this year, but it has to with more beef being produced and more to come.
Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, said in the Extension Service newsletter that the ratio of the retail beef price to pork and broilers continues to hold strong despite growing supplies of all three. Production of beef, pork and broilers were expected to be record large in 2018 leading to record large total meat supplies of nearly 103 billion pounds, up 3.3%.
MEAT PRODUCTION UP
Beef production is up about 1.5% so far this year, but annual production was projected to increase roughly 5%, Peel said.
Choice retail prices in March were $5.871 a pound, up from $5.828 in February but down 0.6% from a year ago, he said. The USDA’s All Fresh beef retail price for March was $5.598 a pound, up from $5.53 in February and up 0.9% from one year ago.
The choice boxed beef cutout declined from a February high of $224.46 per cwt to $213.34 in mid-April but remains 1.6% higher year over year, he said.
March’s pork price was $1.502 a pound, up from $1.478 in February and down 0.7% from a year earlier.
The composite broiler retail price in March was $1.867 a pound, up slightly from February’s $1.861 and down 0.6% from last year.
EXPORT DEMAND STRONG
Net meat exports were projected to move a little more than 12% of total production and hold per capita domestic consumption to 219.4 pounds, retail weight, Peel said. This would be 1.3 pounds higher than last year and the highest total consumption since 2007 but below the 2004 record of 221.9 pounds.
BEEF PRIMAL VALUES MOSTLY HIGHER
In the last four weeks, higher primal values for the rib, chuck, brisket, short plate and flank were offset partially by lower loin and round values.
Briskets were especially strong, with wholesale values up more than 30% from last year, while ribeyes were down from earlier highs but still up 6% from last year.
Higher chucks were led by strong flat iron steak and chuck roll prices, up roughly 28% from a year ago. Short ribs also were up about 27%, likely supported by strong export demand.
Loins have declined relative to other parts of the carcass over the last decade, he said. Currently, tenderloins are down about 11% from 2017 while loin strip prices are roughly 7% lower.
CATTLE, BEEF RECAP
On the Livestock Exchange Video Auction Wednesday, 161 head sold for 1- through 9-day delivery at $122 per cwt, and 338 sold for 1- through 17-day delivery at $120.
Last Wednesday, cattle sold at $114 to $118 per cwt.
Cash trade got started Thursday at $121 to $122 per cwt on a live basis. No trade was reported in dressed markets.
Early week cash cattle last week were $117 to $118 per cwt on a live basis, the top of the previous week’s $115 to $118 trade. On Friday, they were up to $118 to $120 in Kansas and $121 to $122 in Nebraska. Dressed-basis trading was at $190, steady to down $2 from the previous week.
The USDA choice cutout Thursday was down $0.30 per cwt at $211.34, while select was off $0.09 at $198.48. The choice/select spread narrowed to $12.86 from $13.07 with 150 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $137.12 per cwt, down $0.78. This compares with Thursday’s Apr settlement of $137.22, down $1.52.