As 2022 draws to a close, beef and pork cutout values are deflating a little sooner than normal, according to USDA Agricultural Marketing Service data compiled and graphed by the Livestock Marketing Information Center in Denver.
Wholesale prices for both meats tend to soften seasonally since retail grocers and restaurant buyers have their year-end needs booked.
It is not uncommon, though, for wholesale beef and pork prices to bounce the last week of the year as slaughter rates drop for holiday observances and buyers fill in the last of their expected January needs.
Judging consumer post-holiday meat buying interest this time around could be like reading tea leaves, one analyst said. Consumers are decrying the rising cost of food, yet they have shown a willingness to pay up for better cuts of beef to serve their holiday wishes.
Once the holidays are in the rearview mirror and holiday bills start piling up, early 2023 grocery buying could be a different story, the analyst said. News reports show shoppers planning to spend as much or more this Christmas season as in other years, but inflation has to be eating into their buying power.
One thing that could be fueling inflation, and consumer meat buying, is the unemployment rate and the pace at which employers are adding new jobs, the analyst said. More people employed means more money circulating in the economy, so per capita meat buying may suffer in 2023, but the total could remain somewhat stable.
BEEF CUTOUT SAGGING
Last week’s average choice beef cutout from the USDA was $254.15 per cwt, down from $257.08 a week earlier and down from the most recent high of $263.74 the first week of November.
That compares with last year’s weekly price of $279.25 per cwt, down from $279.67 a week earlier and down from the most recent high of $288.64 the second week of November.
The 2016-2020 average shows the average choice boxed beef cutout for last week at $216.00 per cwt, up from $214.14 a week earlier. This week in the five-year average was the seasonal high at $217.17 per cwt.
PORK CUTOUT DECLINING
The USDA’s weekly pork cutout price last week was $90.07 per cwt, down from $94.39 the previous week and down from the most recent high of $102.68, posted the second week of October.
That compares with the cutout last year at $85.03 per cwt, which was down from $89.15 a week earlier and down from the most recent high of $112.97 the last week of September.
The average price last week was $77.31 per cwt, versus the previous week’s $78.92 and the most recent high of $80.44 the third week of October.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $155.00 to $158.67 per cwt, compared with last week’s range of $149.09 to $159.50. FOB dressed steers, and heifers went for $243.70 to $247.49 per cwt, versus $237.81 to $250.98.
The USDA choice cutout Wednesday day was up $6.31 per cwt at $248.96 while select was up $0.63 at $219.77. The choice/select spread widened to $29.19 from $23.51 with 130 loads of fabricated product and 44 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were steady at $1.90 to $2.10 a bushel over the Mar futures and for southwest Kansas were unchanged at $1.00 over Mar, which settled at $6.41 1/4, up $0.04.
No cattle contracts were tendered for delivery Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $179.02 per cwt up $0.49. This compares with Wednesday’s Jan contract settlement of $180.90, down $0.90.