Beef Ribeye Prices In Counter-Seasonal Decline

Wholesale prices for beef ribeyes are in the throes of a counter-seasonal decline and may be a good part of the reason beef packers aren’t bidding more for live cattle.

It also may have something to do with cattle investors’ reluctance to bid cattle higher.

A Livestock Marketing Information Center graph of USDA Agricultural Marketing Service data shows the weekly price trend for this year compared with last year and the previous five-year average.

Wholesale ribeye prices this year started out above prices a year earlier and remained there until the last two weeks of March.  They even followed the late-winter march to higher ground and remained above the same weeks a year earlier.

Then, wholesale ribeye prices peaked at $881.05 per cwt in the second week of March, plunging to $813.29 the next week, a loss of $67.76, or 7.69%, in just one week.




It could be argued that this year’s March high just came early since last year, the seasonal peak happened at $873.44 per cwt in the first week of April.  But this leaves out the 2010-2014 seasonal tendency for the cut to peak the first week of July.

Following that line of thought, it could be said that last year’s seasonal peak happened as much as three months early, making this year’s apparent peak even earlier.

Reasons for the early peak appear obscure.  On the one hand, the ribeye, when cut into steaks, is a very grillable product, and spring is prime grilling season.

However, Jim Robb, director and senior agricultural economist at the LMIC, said the five-year average line on the graph shows it is not uncommon to have a price hump for ribeyes in late March.  He thinks this is what is happening now.  With this week’s USDA cutout prices rising every day, the ribeye price also could turn higher again as well.




Going forward, the usual late-year rally in ribeye prices as the market for holiday rib roasts heats up could be muted by increased supplies of cattle and beef, Robb said.  Demand likely will go up seasonally, but price response may be muted by increased supply.

So, rather than have a late-year peak in ribeye prices as is normal, this year’s price line could show two peaks, one in the spring and one in the fall.  And the two could be very near each other a little above $850 per cwt.




Cash cattle markets traded lightly Thursday at $135 to $136 per cwt on a live basis.  However, asking prices were around $136 to $138 per cwt and $218 or more on a dressed basis while bids still were reported at $132 to $133 live and $215 dressed.

Business last week was at $132 per cwt up to $136 live with most around $133 to $134, steady to up $2.  In dressed markets, cattle traded at a steady $214 to $216.

The USDA’s choice cutout price Thursday was up $2.22 per cwt at $224.43, and select was up $2.30 at $214.83.  The choice/select spread narrowed to $9.60 from $9.68 as 68 loads of fabricated product were sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $157.01 per cwt, down $1.01.  This compares with the Apr CME settlement Thursday of $154.92, up $0.12.