The difference between weekly wholesale prices for USDA choice and select boxed beef are reaching what might be called a decision point.
The price difference, or spread, has widened sharply since its most recent low the second week of September, but this week or next is the point at which the 2018-2022 average begins to narrow into the end of the year.
The rub comes when comparing the trend with last year when the choice/select spread continued to widen unevenly through December. The spread in 2022 peaked in October before dropping through November, only to rise again in December.
WIDENING SPREAD
Last week, the choice/select spread derived from USDA data by the Livestock Marketing Information Center in Denver was listed at $25.58 per cwt, up $6.29, or 32.6%, from $19.29 a week earlier and up $14.28, or 126.4%, from the most recent low of $11.30 the second week of September. Last week’s price spread was down $0.98, or 3.69%, from $26.56 per cwt reported for the same week a year earlier but up $5.14, or 25.1%, from the 2018-2022 average of $20.44.
A look at price graphs for various primal beef cuts showed that gains in boneless, light ribeyes; chuck rolls; bottom rounds, and full tenderloins contributed to the rise in the whole carcass value. The ribeyes last week averaged $1,199.92 per cwt, up $269.90, or 29.0%, from the most recent low of $930.02 the third week of July, up $7.16, or 0.60%, from $1,192.76 last week and up $205.18, or 20.6%, from the previous five-year average of $994.74.
The chuck roll stood out as a solid gainer, rising to $583.56 per cwt last week, up $226.20, or 63.3%, from the most recent low of $357.36 the last week of July, up $187.52, or 47.3%, from $396.04 in the same week last year and up $250.84, or 75.4%, from the average of $332.72.
Tenderloins last week were $1,461.66 per cwt, up $304.46, or 26.3%, from the most recent low of $1,157.20 the third week of July, up $285.96, or 24.3%, from the 2018-2022 average of $1,175.70 but down $130.89, or 8.22%, from last year’s 1,592.55.
BONELESS BEEF NOT PARTICIPATING
Not participating in the latest gains in the weekly wholesale boxed beef prices was boneless beef. Fresh 90% lean prices remained much higher than last year or the 2018-2022 average but only managed a gain in the last week since it peaked the last week of August, and 50% remained in a slide.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.95 per cwt to $188.92, compared with last week’s range of $187.00 to $189.35 per cwt. FOB dressed steers, and heifers went for $293.66 per cwt to $297.66, compared with $292.16 to $298.16.
The USDA choice cutout Thursday was down $0.24 per cwt at $321.17 while select was down $1.43 at $294.34. The choice/select spread widened to $26.83 from $25.64 with 161 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $348.42 per cwt, and 50% beef was $76.74.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.40 a bushel over the Dec corn contract and in Kansas at $0.25 over Dec, which settled at $4.21 1/2 a bushel, up $0.02 1/2.
No cattle contracts were tendered for delivery Thursday against the Oct contract.
The CME Feeder Cattle Index for the seven days ended Wednesday was $249.56 per cwt, down $1.15. This compares with Thursday’s Oct contract settlement of $249.40, up $0.82 and Nov’s $248.52, up $1.30.