Beef Prices Weaken With Holiday Buying

Wholesale beef prices weakened this week, with prices Thursday continuing to turn back a Tuesday rally attempt as holiday buying wanes.

Retail grocers and restaurants by this week have all of their expected holiday sales in store and are just waiting for shoppers to begin their three-day Memorial Day holiday weekend.  The holiday, resplendent with hamburgers, hot dogs and steaks, marks the unofficial beginning of the grilling season, and the meat most often associated with the grill is beef.

To be sure, many grill other meats, but chicken and pork are far down the pecking order for products being seared in the back yard, according to sales data and surveys.  Beef is more forgiving than other meats and provides a more satisfactory eating experience.

Choice wholesale beef prices over the last five business days are down $2.52 per cwt after a steep $2.76 fall on Thursday, according to the USDA.  Select wholesale prices are down $1.99.

During the last five business days, the USDA’s choice beef cutout value jumped Tuesday in a last-gasp rally as buyers with short inventories came to the market to fill in.  Once the short-covering rally was over, prices resumed their downward trek.




Seasonally, beef prices turn lower after the Memorial Day push as beef production increases and overpowers the demand for grilling fare into the Independence Day holiday.  There is a seasonal production peak in late June followed by another peak in late August.  From there, beef production trails off into winter.

Wholesale beef prices jump in August ahead of the Labor Day holiday, often considered the last gasp of the summer grilling season.  As schools resume, temperatures cool and families settle into more routine activities, demand for grilling fare declines.

Wholesale beef buying picks up again in October as retailers and grocers book product into the year-end holidays.  This product isn’t consumed until the holidays, but it is booked ahead.




The value of beef trimmings jumped $1.46 per cwt Thursday to $8.07, but it’s impossible to detect a price trend based on daily gyrations of the trimmings market.  In fact, it’s difficult to glean much of a price trend when looking at a graph of weekly trimmings prices.

More than many other markets, this market is tossed about by every wave of change in production, imports and exports.  There is a tendency for a summer price decline as domestic production increases, but it’s far from certain.

Current prices are showing similar moves with prices rising and falling almost daily.




Cash cattle markets were slow Thursday, even though reported sales volumes hint that more trading could be done.  Any further action was expected to be at this week’s $159 to $161 per cwt on a live basis or $251 to $255 on a dressed basis.

The USDA reports only 16,198 steers and 6,556 heifers sold for slaughter in the live-basis open market and 6,718 steers and 2,128 heifers in the dressed market, leaving room for more sales on Friday.

Few, however, expect a robust cash market as the USDA’s monthly Cattle-on-Feed and Cold Storage reports are due for release at noon ET.  After the reports are released, trading interest is expected to decline.

Beef prices Thursday were lower, with the USDA choice cutout at $262.22 per cwt, down $2.76, and the select cutout at $249.32, down $1.74.  Volume was active with 173 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $219.78 per cwt, down $0.07, compared with the May futures settlement Wednesday of $220.10.