Ground Beef Demand Rising

Demand for ground beef is rising as evidenced by flat wholesale prices for 90% beef trimmings and increasing cow slaughter and prices.

USDA data show the average weekly price for fresh 90% lean beef trimmings last week at $296.01 per cwt, virtually identical to the $296.05 from the previous week.

However, total cow slaughter rose in the latest week to 105,262 head from 101,482 the week before, a gain of 3,780, or 3.72%.  This is the highest weekly cow slaughter since the second week of April when it was 105,958 head.

And that increased slaughter came at a price.  Prices for 85% to 90% lean slaughter cows in the Southern Plains were up $1.64 per cwt on a live basis to $117.62 from $115.98, a gain of 1.41%.

Graphs of USDA data from the Livestock Marketing Information Center show total cow slaughter rising seasonally, albeit at a lower rate than either last year or the previous five-year average.

As cows fail fall pregnancy tests, they are sent to slaughter, and the annual slaughter peak usually happens in mid-to-late November.  A secondary peak occurs in mid-December, and a third arises about the second week of January.

This year, the annual peak occurred in January with a decline into the annual low the first week of July.  This decline was greater than either last year or the average as producers placed a greater emphasis on growing the herd.  From there, the pattern generally has followed the seasonal trend.




Meanwhile, prices for 90% lean trimmings are much higher than a year ago and are maintaining summer’s counter-seasonal boost.  An LMIC graph shows a surge in trimmings prices starting in late June and continuing well into July.  From there, prices have held in a narrow, sideways range.

Normally, 90% lean trimmings prices peak in late May with another bounce in July.  From there, prices work lower into the October low.

This year’s abnormally high prices for 90% trimmings reflects tight supplies of cows going to slaughter and a reduced use of Lean Finely Textured Beef, which produces a very lean product.  Some retail sellers are beginning to come back to this product but are adding it to their labels, and a greater migration this way could result in price pressure on cows and cow beef.




Slaughter cattle prices last week declined further from the record high three weeks earlier of $169.70 per cwt on a live basis in the Southern Plains.  The market maintains an upward bias, but seasonal tendencies are working against beef and cattle.

The Thanksgiving Day holiday means more turkey for a week in most households, and packers, who usually are working with negative margins at this time of year, pressure cash cattle prices all they can.

Slaughter cattle in the Plains last week sold at mostly $167 per cwt on a live basis, down $1 from $168 the week before.

As prices for fed cattle struggle, prices for feeders also have come off of their early October record highs.  Sources think prices for calves will struggle through the winter and pick up again in the spring.  This doesn’t mean, however, that they think feeder steer prices will fall.  Most believe prices will remain supported by low inventories.

Beef prices were mixed Tuesday with the choice cutout up $0.83 per cwt at $249.97 and select down $0.72 to $238.43.  There were 149 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $241.21, down $0.48 from Friday, above the nearby Nov contract’s Tuesday settlement of $238.85.