It looks like spot market boxed beef cutout values are turning higher, and it’s right on schedule, which should be good news to packers who are thought to have been operating in the red for months now.
A Livestock Marketing Information Center’s graph on weekly choice beef carcass prices turned higher last week, and this week’s daily quotes have been higher every day – sharply higher the last two days.
After falling every week since the second week of January, the choice beef cutout value rose $0.78 per cwt, or 0.33%, to $239.47 from $238.69.
Last year, the value of choice boxed beef didn’t begin rising for another week, but the gains were more extreme as the short-supplied market was more volatile. This year’s choice beef market looks just as volatile and is operating on a higher plain than a year ago, but the moves so far have been timed with the 2009-2013 average.
The daily spot market boxed beef report through Wednesday shows choice boxed beef rising for nine straight days to $246.49 per cwt on Wednesday from its most recent low of $237.68 on Friday, Feb. 13. This is a gain of $8.81, or 3.71%. Just in this week, the value has risen $6.18, or 2.57%.
The select beef cutout has only been rising for the last seven trading days, but the jumps have been more extreme, closing the spread between choice and select prices. During the period, the select cutout rose $11.89, or 5.10%, to $244.93 on Wednesday from $233.04 on Monday, Feb. 16.
SLAUGHTER DOWN
But lest anyone think the cutout value gains are all fresh demand as retailers and restaurants gear up for March features, a look at slaughter data shows that much of the gains can be tied to lower slaughter rates.
An LMIC graph shows that total weekly cattle slaughter has declined since the third week of January, squeezing the amount of beef produced, especially if the buyers want certain steak cuts.
Slaughter last week was estimated at 524,000 head, down 13,000, or 2.42%, from 537,000 the week before and down 57,170, or 9.84%, from this year’s peak of 581,170.
Weekly beef production has declined as well, even though steer dressed weights are up 3.63% from last year. The USDA estimated beef production last week at 427.2 million pounds, down from 472.3 million the third week of January.
CASH MARKETS LIGHTLY TRADED
Cash cattle markets were mostly quiet Wednesday. Limited action was reported at $157 per cwt on a live basis and at $250 to $252 dressed. Cattle traded last week at $158 to $160 live and $254 to $258 dressed.
The CME Feeder Cattle Index through Tuesday was $208.61 per cwt, down $0.15, and well below the Mar feeder cattle futures settlement of $196.97.