Beef Prices Dropping Seasonally; Turning Higher Soon

Weekly average wholesale beef prices have made the annual early spring turn lower, awaiting the late-spring rally to the annual top.

Those seasonal peaks and valleys in prices are entrenched and appear to have little to do with concurrent slaughter data, except in the broadest sense.  Instead, the seasonal price movements appear to have as much or more to do with relative weekly demand for beef and/or the more expensive cuts, which can skew the average prices.

The only thing left then is to compare price changes from year to year, which have as much, or more, to do with slaughter rates and beef production than with weekly beef demand.




Last week’s average USDA weekly negotiated boxed beef cutout value for choice, 600- to 900-pound carcasses was $226.48 per cwt.  This was down $1.72, or 0.75%, from $228.20 the previous week and $2.47, or 1.08%, off the latest seasonal high of $228.95 two weeks prior.

However, last week’s price was $9.07, or 4.17%, above the $217.41-per-cwt average shown in the same week last year and $5.06, or 2.29%, more than the 2013-2017 average of $221.42.

Graphing the weekly boxed beef prices does not give any strong indication of whether boxed beef prices will remain above last year or the previous five-year average, though, a market analyst said.  Last year, prices tended to run below the average through the summer months, but this year’s weekly price averages have been above 2018 most of the time and have crossed the average twice.




But how low will boxed beef prices go in this current downturn before the rush to the top is anyone’s guess.  It will have a lot to do with the weather and the perceived state of the US economy.  Export demand also will play a part, but this is harder to establish any kind of trends.

The average early spring bottom for the 2013-2017 time period is $221.31 per cwt, and it comes in the second week of April.

However, last year’s early spring bottom hit $211.78 per cwt, and it came the third week of April.

After hitting that bottom, the weekly wholesale boxed beef price rises quickly to its annual high.  The 2013-2017 average high is $234.02 per cwt and comes about the third week of May when advance booking for the Memorial Day holiday either is complete or nearing completion.

Last year, the spring high was $231.94 per cwt, and it also came in the third week of May.

Once the annual high is in, prices decline into the first week of October where holiday demand for rib roasts and steaks kicks in and takes average prices up to a fall peak.

There is a secondary price hump about the third week of June, but otherwise, prices trend lower through the summer.




Cash cattle trading was reported at a steady $124 per cwt on a live basis.

Dressed-basis sales last week ranged from $200 to $206 per cwt but were mostly $204, down $2 to $3.

The USDA choice cutout Thursday was down $0.22 per cwt at $228.83, while select was up $0.33 at $219.95.  The choice/select spread narrowed to $8.88 from $9.43 with 75 loads of fabricated product sold into the spot market.

There were 30 tenders Thursday for heifer deliveries against the Apr futures contract and seven retenders at one for steers.  There also were seven reclaims at one.

The CME Feeder Cattle index for the seven days ended Wednesday, was $143.35 per cwt, down $0.28.  This compares with Thursday’s Apr contract settlement of $145.42, up $0.25.