The weekly wholesale price spread between fresh 90% lean boneless beef prices and their 50% lean counterpart continues to grow as 90% lean product holds its own as 50% product declines.
What’s puzzling is that 90% lean beef is holding near its record high so well while prices for other beef cuts are fading.
In fact, 50% lean beef prices are lower than the 2018-2022 average, even though 90% lean prices are record high.
90s STRONG
Last week’s USDA-reported weekly price for 90% lean beef was $346.37 per cwt, compared with the previous week’s $345.32 and the record high of $346.86 the week before that. The latest price was up $71.11, or 25.8%, from $275.26 per cwt in the same week last year and up $105.59, or 43.9%, from the previous five-year average o $240.78.
At the same time, the latest USDA weekly price for 50% lean beef was $83.75 per cwt, down from $88.05 the previous week and down from $94.05 the week before that. Last week’s price also was down $106.35, or 55.9%, from the 2023 price of $190.10 and down $67.14, or 66.9%, from the 2018-2022 price of $100.36.
Prices for both products are out of step with historical norms, but 50% lean beef is diverging the most. The product usually is rising in value at this time of year to its annual high in May. A secondary high is set around the Labor Day holiday weekend.
Weekly prices for 90% lean product are rising seasonally, but the steepness of the rise is out of character.
OTHER CUTS WEAKENING
While 90% lean beef prices are rising, prices for other cuts are declining.
Wholesale prices for boneless, light ribeye prices were trending lower and last week were $937.28 per cwt, up from $909.35 the previous week but down from $975.48 two weeks earlier. Last week’s price also was down $132.72, or 12.4%, from $1,070.00 per cwt in the same week last year but up $33.21, or 3.67%, from the 2018-2022 average of $904.07.
Wholesale chuck roll prices also are trending lower. Last week’s USDA-reported price was $363.04 per cwt, down from $367.64 a week earlier and down $11.66, or 3.11%, from $374.70 a year earlier. It was, however, still $44.09, or 13.8%, higher than the previous five-year average of $318.95.
Boneless wholesale loin strip prices, while higher than either last year or the five-year average at $938.02 last week, still were trending lower after peaking this year at $965.31 the first week of April. It seems to be peaking earlier than the usual last week of May.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.02 per cwt to $185.12, compared with last week’s range of $181.32 to $187.00 per cwt. FOB dressed steers, and heifers went for $287.19 per cwt to $290.67, compared with $285.91 to $290.32.
The USDA choice cutout Tuesday was down $3.16 per cwt at $294.37 while select was off $0.26 at $289.95. The choice/select spread narrowed to $4.42 from $7.32 with 91 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $346.45 per cwt, and 50% beef was $77.04.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.36 to $1.44 a bushel over the May corn contract, which settled at $4.39 1/2 a bushel, up $0.00 1/4.
No live cattle contracts were tendered for delivery Tuesday.
The CME Feeder Cattle Index for the seven days ended Monday was $247.00 per cwt, down $0.18. This compares with Tuesday’s May contract settlement of $244.57, down $3.45.