Right on schedule, holiday beef demand has shown up in wholesale markets, and it appears to be aggressive, said Glenn Selk, Oklahoma State University agricultural economist, in a letter to Extension agents called Cow/Calf Corner.
Strong demand and tighter choice supplies (from a lower percentage of choice carcasses) are contributing to sharply higher choice beef product prices in the fourth quarter, he said.
Boxed beef prices increased about 10% over October into early November, Selk said. This increase was significantly higher than the normal seasonal bump of less than 2%. As of Monday, the USDA’s choice boxed beef cutout value was up nearly 7% year over year.
BEEF DEMAND HAS MANY PATTERNS
As grilling season wanes after Labor Day, prices for some steak items tend to decline, Selk said. For instance, wholesale strip loins dropped about 6% in the past month.
However, strip loin prices Monday were up more than 6% from a year ago, he said.
Another part of the loin, the tenderloin, has a very different seasonal price pattern, Selk said. Colder weather typically supports restaurant steak demand resulting in higher tenderloin prices through the fourth quarter.
This fall, wholesale tenderloin prices increased faster and more dramatically than usual, jumping 38% in October, he said.
Overall loin primal prices increased more than 11% in the past month and Monday were up 10% year over year, Selk said.
RIBEYE PRICES CLOSELY TIED TO HOLIDAY DEMAND
Ribeye prices typically have a pronounced seasonal peak in November based on holiday demand for prime rib, he said. This year the price increase started early with October wholesale ribeyes up more than 18%.
Wholesale choice ribeye prices touched $10 a pound last week, the first time since mid-2017, Selk said. Rib primals increased nearly 13% in the past month and Monday were 4% higher year over year.
ENDS SEE SEASONAL PUSH
Chuck and round prices tend to increase seasonally from August into September with the prospect of fall weather boosting demand for roasts and stews, he said. End meat primals generally are flat through September and October and slightly weaker to finish the year.
October was a mixed bag for chuck products with shoulder clod prices higher despite lower top blade (think flat iron steaks) prices, Selk said. Several chuck products also have become popular export items, so seasonal patterns for these cuts have been changing in recent years.
Demand for the clod (petite) tender continues very strong with prices up more than 25% in the past month, he said. Wholesale chuck roll prices were higher, up 12%.
Overall chuck primal values were up more than 7% over October and Monday were nearly 6% higher year over year, Selk said.
Round products displayed similar variability with top rounds and outside rounds moving higher in October and bottom round and eye of round prices lower, he said. Wholesale round primal values moved nearly 5% higher and Monday were up about 4% year over year.
CATTLE, BEEF RECAP
Cash cattle trading took place last week at mostly $112 up to $114 per cwt on a live basis, up about $3 from last week. Dressed-basis trading was reported at $180 per cwt, up $5 to $6 from the previous week.
The USDA choice cutout Tuesday was up $1.24 per cwt at $236.05, while select was down $0.56 at $209.82. The choice/select spread widened to $26.23 from $24.43 with 90 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday was $146.24 per cwt, down $0.21 from the previous day. This compares with Tuesday’s Nov contract settlement of $147.85, down $1.22.