Beef demand is very complex. Although it is discussed as a single concept it is, in fact, the demand for many different beef products, each of which is a separate market, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
Figure 1 shows the average seasonal pattern of Choice boxed beef prices with a peak in June and lows at the beginning and end of the year.
The average seasonal price pattern is the net seasonality from many different beef products, each with unique seasonal patterns, Peel said. Seasonal indexes studied are five-year centered moving averages from 2021-2025.
The seasonal pattern for each product showed a percentage variation around the average from the seasonal high to low price, Peel said.
HIGHER-PRICED VS. LOWER-PRICED CUTS
The highest price beef cuts, tenderloin and ribeye, peak at the end of the year, with increased restaurant and holiday demand, along with the chuck flap, the number four beef cut, which has a similar seasonal price pattern, he said.
A “Summer Grilling Demand” chart would show four cuts that all peak in June, Peel said. These four cuts, strip loin, flank, top sirloin and tri-tip have the most pronounced seasonal patterns and contribute the most to the overall seasonal pattern of boxed beef prices. For example, tri-tip price has an average range of 43.9% from the peak in June to the October low.
The seasonal patterns of three round cuts with very similar seasonal price patterns would peak in the third and early fourth quarter of the year, he said. These relatively low-value cuts; outside round, eye of round, and bottom round, are used sometimes for grinding and frequently for other processed beef products, such as jerky and sausage.
Studies show three diverse cuts including brisket, which shows some summer demand tendency, peaking in June, along with short ribs, which largely are an export product, and chuck arm roast, which tends to have higher prices in cooler weather at the beginning and end of the year, Peel said.
All of those cuts have relatively narrow seasonal price ranges with chuck arm roast and short ribs each having less than 10% variation from the seasonal peak to low price during the year, he said.
There are many other beef products as well, each of which has a distinct seasonal price pattern and each of which contribute to the overall value of each beef carcass and to beef demand, Peel said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $238.00 per cwt to $252.00, compared with last week’s range of $248.00 to $256.91 per cwt. FOB dressed steers and heifers went for $373.92 per cwt to $388.86, compared with $389.00 to $400.06.
The USDA choice cutout Wednesday was down $3.41 per cwt at $363.50 while select was down $3.66 at $350.57. The choice/select spread widened to $12.93, from $12.68 with 87 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The USDA-listed the daily weighted average wholesale price for fresh 90% lean beef as $460.10 per cwt, and 50% beef was $159.67.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.18 to $1.33 a bushel over the Sep corn contract, which settled at $4.61 3/4 a bushel, up $0.09.
The CME Feeder Cattle Index for the seven days ended Tuesday was $353.12 per cwt, down $3.10. This compares with Wednesday’s Aug contract settlement of $341.20, down $8.35.