Grocers Gearing Up For Grilling Season

Grocery retailers are gearing up for grilling season, pushing prices for grillable cuts at the expense of products that are cut into roasts.

The USDA Agricultural Marketing Service’s data show a decided bump in wholesale prices for boneless beef ribeye prices the last three weeks while prices for chucks and rounds have declined over the same period.

Steaks like the strip, top sirloin and filets all come from the boneless ribeye.  When the bone is left in, T-bones and shell steaks are the result.

Chucks and rounds come from the shoulders and hind quarters, respectively, muscles that are used more during the animal’s life, and require a longer cooking time at a lower temperature to deal with their more extensive connective tissue.

Steaks and ground beef are the usual targets of the grill because they either don’t have as much tough connective tissue or it is ground up mechanically.  Both have a relatively short cooking time in comparison to chucks or rounds.

Ground beef also contains a large percentage of beef trimmings, extra pieces from the carcass breakdown process, as well as ground chuck or round or cow meat, so watching the price of trimmings for signs the grilling season is close is something of an art.  But watching the wholesale price of ribeys is more straightforward.

USDA-AMS data show the seasonality of the rise in beef ribeye prices.  The 2010-2014 average shows a strong tendency to rise into early July (Independence Day).  This is followed by a steep decline into early August or September and a subsequent rise into early December as demand for rib roasts increases.

Last year, price action was more volatile and may have shown price-point resistance.  Prices peaked at $873.44 per cwt the first week of April and then declined before being challenged at $874.00 the second week of May.

That established a double top on the graph that was finally eclipsed in the November/December rush, which has a stronger seasonal tendency.  What is significant is that the spring peak came early last year and appeared to struggle once it reached the $874.00 area.  Wholesale prices remained above average, however, somewhat masking the decline from an early peak.

Early indications point to above-average ribeye prices again this year, but it remains to be seen whether this year’s increase in beef production will translate into price peaks that are lower to last year and trend closer to the average.




Cash cattle markets in the Plains remain quiet, although the USDA reports 88 heifers sold Tuesday on a live basis at $128 per cwt, which would be at the low end of Nebraska’s cash market last week.

Bids of $128 to $129 per cwt on a live basis were heard, and asking prices are holding around $138.  No dressed-basis bidding was reported, although asking prices held around $215.

Cash cattle sold $3 per cwt lower last week at mostly $133 per cwt on a live basis in Texas and Kansas.  In Nebraska, live sales were posted at $128 to $132, with dressed-basis sales at $206, generally $4 lower.

The USDA reported mixed wholesale beef prices Thursday, with choice down $0.96 per cwt at $213.39, and select up $1.64 at $209.27.  The choice/select spread narrowed to $4.12 from $6.72, and there were 116 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $157.79 per cwt, up $0.84.  This compares with Mar’s Thursday settlement of $156.47, up $0.47.