Day after day of lower boxed beef prices can give the impression that the bottom has fallen out of the wholesale beef market, but that’s not the necessarily the case.
Data from the USDA’s Agricultural Marketing Service and published by the Livestock Marketing Information Center through last week showed that the choice boxed beef cutout value remained well above last year and the 2015-2019 average. Even after this week’s average decline is figured in, the 2021 line likely will remain above the two previous historical lines, an analyst said.
DOWN BUT NOT OUT
The AMS data showed last week’s average of daily choice boxed beef prices to be $308.76 per cwt, down $11.46, or 3.58%, from the previous week’s $320.22 and off the latest high of $347.02 the last week of August by $38.26, or 11.0%.
Last week’s average choice beef price also was up $92.89, or 43.0%, from $215.87 in the same week a year ago and up $104.59, or 51.2%, from the previous five-year average of $204.17.
From here on out to the end of the year, choice boxed beef prices tend to move sideways in a narrow range, the data show. Late-year variations can, and do, occur amid seasonal demand for choice middle meats for the holidays.
RIBEYES STRONG
Choice beef ribeyes appear to be the leader in the choice beef market. Last week’s average price was $13.71 a pound, down $1.07, or 7.24%, from the latest cycle high (and this year’s annual high) of $14.78 a week earlier. But last week’s price was up $5.45, or 66.0%, from $8.26 a year earlier and up $6.39, or 87.3%, from the 2015-2019 price of $7.32.
Average prices for ribeyes tend to move higher into December from last week. Often, the December high is the annual high for this cut.
Last year, the wholesale price of ribeyes moved higher with the season but spiked in December amid some last-minute buying by retailers for the holidays. With COVID closures last year, it was hard to book product ahead, leaving some buyers to scramble for fill-in bookings, the analyst said.
OTHER CUTS NOT AS STRONG
Other primal beef cuts also were historically strong last week, but many are less strong than others. Full tenderloin prices are up above last year and the previous five-year average but have been falling for five straight weeks.
However, strip loin prices last week were down near the year’s low, which came the first week of January. They also were below last year and the average.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $124.08 to $125.06 per cwt, compared with last week’s range of $123.98 to $126.80. FOB dressed steers and heifers went for $194.31 to $196.10 per cwt, versus $194.02 to $198.29.
The USDA choice cutout Thursday was down $2.35 per cwt at $294.98, while select was off $2.46 at $269.32. The choice/select spread widened to $25.66 from $25.55 with 102 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.20 to $1.35 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.36 3/4 a bushel, down $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $153.78 per cwt down $0.88. This compares with Thursday’s Sep contract settlement of $153.92 per cwt, down $0.35 and the Oct settlement of $152.55, down $2.07.