The weekly average USDA boxed beef cutout value is moving higher seasonally, although the most recent levels are above last year and the 2012-2016 average.
The weekly boxed beef cutout value rose $0.70 per cwt to $217.37, its highest value since mid-June, to close out the week ending Nov. 9.
But choice beef is not the only quality grade to experience price increases as beef production grows seasonally, said David Anderson, extension economist for Texas A&M, in the Livestock Marketing Information Center’s In The Cattle Markets.
ACROSS THE BOARD GAINS
While the daily choice beef cutout value is up about $15 per cwt over the last month, the other quality grades have been increasing, as well, Anderson said. The select beef cutout value increased about $10 per cwt during October.
Normally, the choice/select spread increases in the fall, averaging about $13 per cwt over the last five years, he said. For the week ending Nov. 2, the choice/select price spread hit $17 per cwt, as choice beef price gains outpaced select values.
The other two quality grades of interest, prime and branded also experienced gains through the month, Anderson said. Using weekly average reported values, the prime cutout increased about $2.50 per cwt during October.
The branded beef category includes all beef in branded programs that graded choice. The branded beef cutout value gained $6.19 per cwt in October.
Among the primal cuts, across all quality grades, values increased the most for the primal rib, Anderson said. Value gains in the rib ranged from a $27.35 increase for prime to a $12.98 increase for select.
Loin values increased for choice and branded beef, while declining for prime and select. Brisket values increased across all grades, while showing the most increase in the choice category. Short plates and flanks declined in value across all grades.
AVAILABLE SUPPLIES
Continuing a trend for this year, a smaller percentage of cattle are grading choice than a year ago, he said.
A feedlot manager said that was because the USDA reprogramed its computer-assisted graders at the packing plants early this year. There was debate at the time about whether this was because too many were gracing choice, but the change stuck.
For the week ending Oct. 20, 70.8% of cattle presented for grading graded choice, compared with 71.6% the same week last year. For the same week, 8.9% of carcasses graded prime, up from last year’s 7.1%.
More graded select, 17.4% this year vs. 15.3% last year. When factoring in slaughter and weights, the grading data continues to indicate larger supplies of prime and select beef and a little less choice than a year ago, Anderson said.
It looks like steer slaughter is starting to pick up a little so he expected growing beef supplies in the coming months, especially when considering more cattle on feed than a year ago.
CATTLE, BEEF RECAP
Cash cattle traded Wednesday at $110 to $112 per cwt on a live basis, down $3 to $5 from last week, while dressed-basis trading was reported at $175 to $176 per cwt, down $3 to $4.
The USDA choice cutout Wednesday was down $0.92 per cwt at $213.16, while select was off $1.80 at $197.18. The choice/select spread widened to $15.98 from $15.10 with 121 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday, was $149.38 per cwt, down $0.51. This compares with Wednesday’s Nov settlement of $148.97, unchanged.