A look at wholesale beef prices shows that grocers probably are preparing for the spring grilling season early this year.
Primal carcass cuts that can be cut into grill-sized products are moving up in price with many showing earlier-than-normal gains.
RIBEYS SHOW EARLY GAINS
Weekly boneless light wholesale ribeye prices last week were reported by the USDA’s Agricultural Marketing Service and compiled by the Livestock Marketing Information Center in Denver. They showed that prices this year took an unseasonal bounce in January and February and leveled out at a level that rivals the five-year average December high.
The average price last week was $9.04 a pound, the second weekly decline all year and down from the 2021 high so far of $9.08. From the first week of the year to the February high, boneless ribeyes rose $1.60 a pound in price, or 21.3% to $9.12 from $7.52.
Data shows, though, that a rise like that usually waits until about the third week of February, topping out in mid-March for a seasonal high around $8.12 a pound. From there, a short dip ensues until the rise to the seasonal high about the last week of May.
Some lingering strength still can be seen in this market until the Independence Day preparations are done. After that, the ribeye market sinks into the summer doldrums, punctuated by a late-summer market ahead of the Labor Day holiday.
Boneless loin strips also showed an early rally that began the second week of January and continued through last week. Already, prices are approaching the normal seasonal high of $8.43 a pound.
BOTTOM ROUNDS SHOW NOTHING SPECIAL
In contrast, weekly wholesale prices for 18- to 33-pound bottom rounds showed nothing special and no special deviation from last year or the 2015-2019 average.
The average wholesale price for bottom rounds last week was $2.42 a pound, compared with $2.49 a week earlier, $2.17 a year earlier and the previous five-year average of $2.26.
It could be said that this year’s price move for bottom rounds was counter-seasonal in that prices usually show a slight decline until about the first of April since this cut usually isn’t used on the grill. It’s usually slow roasted and sliced thin.
Last year, this product took a sharp turn higher as beef packing plants were hit hard with closures to control the COVID-19 virus, but such an event was unheard-of. It’s unclear whether market analysts will use the unusual data in their seasonal average calculations or just note the variation with an asterisk.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains last week at mostly $114 up to $115.50 per cwt on a live basis, down $0.50 to up $1 from the previous week. Dressed-basis trading was seen at $181, to $182, steady to up $1.
The USDA choice cutout Monday was down $1.50 per cwt at $239.03, while select was off $2.09 at $227.64. The choice/select spread widened to $11.38 from $10.80 with 67 loads of fabricated product and 18 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were at $1.05 to $1.07 a bushel over the May CBOT futures contract, which settled at $5.38 1/4 a bushel, down $0.09 1/4.
One steer and 11 heifer contracts were tendered for delivery against the Feb futures contract Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $138.35 per cwt, down $0.56. This compares with Monday’s Mar contract settlement of $137.20 per cwt, down $1.47.