USDA data show wholesale boneless beef prices are declining, with the fattier product dropping faster than the leaner production.
“Boneless” beef often is a euphemism for trimmings from the fed cattle slaughter process along with meat from cull cows and imported beef trimmings. The fat content is measured and traded accordingly, but the two most commonly watched products are those measuring 90% lean and 50% lean. Products with different fat contents are combined to produce the hamburger sold at retail and through restaurants.
Both the 90% lean product and the 50% lean are responding to seasonal tendencies, but the USDA’s weekly wholesale price for the leaner product remains much higher than either last year or the 2018-2022 average.
The USDA prices are compiled and published in graph form by the Livestock Marketing Information Center on its webpage.
90s HOLDING VALUE
While the weekly wholesale price for 90% lean beef likely has passed its annual peak and has started down, it continues to hold its value in a sedate curve on a weekly line graph. Last week’s average reported price for the product was $363.75 per cwt, down $6.90, or 1.86%, from $370.65 a week earlier and down $12.17, or 3.24%, from the most recent high of $375.92 the last week of August.
Last week’s quoted price was 55.01, or 17.8%, higher than the $308.74 per cwt in the same week a year earlier and $126.53, or 53.3%, higher than the previous five-year average of $237.22.
So far, the annual high for 90% lean beef was $376.17 per cwt the first week of August.
This year’s price peak is late. The 2018-2022 average has the annual price peak coming around the last week of May. Last year, it came the second week of September.
50s DROPPING
Unlike 90s, prices for 50% lean beef are falling, but the move is an exaggeration of a seasonal pattern. Seasonally, there is a secondary price peak the third week of August, and this price peak came right on time.
What’s different this year is that there was no annual peak the second week of May. At that time this year, wholesale prices for 50s were declining to a notable low the last week of May, which accentuated the difference with prices for the lean 90% lean beef.
Last week’s price for 50% lean beef was $97.21 per cwt, down $24.94, or 20.4%, from $122.15 a week earlier, down $24.49, or 20.1%, from $121.70 a year earlier but up $17.87, or 22.5%, from the five-year average of $79.34.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $182.95 per cwt to $185.78, compared with last week’s range of $181.00 to $183.70 per cwt. FOB dressed steers, and heifers went for $285.83 per cwt to $288.73, compared with $284.25 to $290.12.
The USDA choice cutout Wednesday was down $3.72 per cwt at $298.17 while select was down $3.59 at $283.28. The choice/select spread narrowed to $14.89 from $15.02 with 122 loads of fabricated product and 49 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $356.17 per cwt, and 50% beef was $83.68.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.33 to $1.45 a bushel over the Dec corn contract, which settled at $4.15 1/4 a bushel, up $0.03 1/2.
The CME Feeder Cattle Index for the seven days ended Tuesday was $244.30 per cwt, up $0.28. This compares with Wednesday’s Sep contract settlement of $245.37, up $0.42, and Oct’s $246.02, up $0.22.