Beef demand, it seems, really is rising, as evidenced by USDA data on many of the various cuts. What’s more, demand for choice product is outstripping demand for select grade in a seasonal push for holiday fare.
However, that demand for the fattier and generally better-tasting choice beef appears to have started within the last week and does not register on weekly graphs of choice boxed beef cutout values.
Subtracting the USDA’s select cutout value from its choice cutout value shows that prices for choice beef are growing. On a weekly basis, this choice/select spread hit a nearby low of $3.26 per cwt the last week of September but was up to $5.47 last week.
The timing of that choice/select low was uncharacteristic. Normally, there is a low about the first week of August, but the spread last year and this year has been more volatile than the 2009-2013 average.
This year’s peaks and valleys in the choice/select spread appear to be more compressed into the middle of the year with tops and bottoms coming later than a year ago in the first half and earlier than last year in the last half.
PRICES FOR MOST MAJOR CUTS RISE
It was easier to see the growing buyer emphasis on holiday meats a week ago as the USDA’s reported wholesale price for ribs was up sharply in contrast to many other cuts.
This week, daily prices for those other cuts are up more than the rib, although increases were only about two days old. Prices of many primal cuts dipped on Friday but are bouncing back this week.
Prices for branded choice products also are seeing a seasonal upturn, according to Urner Barry’s data on Certified Angus Beef.
After the Labor Day holiday, CAB markets exhibited weak undertones, and demand fell very short of clearing supplies, Urner Barry said Tuesday. Presently, though, CAB middle meats and end cuts are seeing firmer tones, as are the thin meats like the flank and even ground beef.
LOW PRICES ENERGIZE BEEF DEMAND
As beef demand grows with the approach of year-end US holidays, wholesale beef prices this year are there to lend a helping hand. The comprehensive value of beef is well below last year and even is below the previous three-year average.
There is ample incentive for retailers and restaurants to feature beef in coming weeks.
The USDA’s weekly National Comprehensive Boxed Beef cutout value last week was $206.60 per cwt, below the previous week’s $212.11 and well off the three-year average of $242.64.
Primal rib demand began showing up last week, and prices by the end of the week had risen above year-earlier levels. The USDA primal rib price was $309.71 per cwt, compared with $306.70 the previous week and $339.59 a year ago.
Primal chucks, rounds and loins were taking longer to get going, and through last week remained on a downtrend.
CASH FED CATTLE QUIET
Cash fed cattle markets this week remain undeveloped with estimated showlists mixed to lower. No bids were heard as buyers remained aloof, but early asking prices were reported around $135 per cwt on a live basis. Sales last week ranged from $123 to $127.
On a dressed basis, cattle traded last week at $195 to $202, compared with the USDA’s 5-market average the previous week of $187.51.
Wholesale beef prices Tuesday were higher, with the USDA reporting its choice cutout value at $208.46 per cwt, up $3.16 on the day, and its select cutout at $203.34, up $4.22.
The choice/select spread narrowed to $5.12 from $6.18 on Monday, and there were 122 loads of fabricated product moved into the spot market.
CME Feeder Cattle Index for the seven days ended Monday was $185.52 per cwt, up $1.52. This compares with the Oct settlement Tuesday of $189.70, up $0.32.