Market Update
CAB beef specialist analyzes markets.
The first full week of December’s fed-cattle market average of $117 per hundredweight (cwt.) was destined to be down from the week prior’s unexpectedly higher $121 per cwt. Weaker live-cattle futures led negative news, as each day saw a lower close on December and February contracts. The consensus has it that these contracts were oversold, and so far this week the slight uptick is marking a point of stability and a momentary end to the downward slide.
The federally inspected harvest last week was much reduced at 633,000 head, while packers remain profitable and are expected to continue a slight slowing of the pace in weekly head counts. That’s in an effort to maintain margin in a market that expects cheaper cattle input costs, but also cheaper beef cutout prices.
In the boxed beef market, we see weakening cutouts across the quality divisions as the Certified Angus Beef® (CAB®) brand cutout was down $2.50 per cwt., Choice was down $2.30 per cwt. and Select fell by $3.60 per cwt. Lower trending beef cutouts are very much the norm for early December through the Christmas holiday, but the softening market started a week early this year with a slightly lower cutout the last week of November, as well. Price spreads between CAB, low-Choice and Select are holding at expected seasonal levels with some increase on the CAB-Choice price spreads for middle meats above a year ago.
Across the CAB carcass last week we saw only solidly positive pricing on the rib with a 15¢ increase on ribeye roasts, those selling at wholesale levels between $6.50 and $7.15 per pound. Up and down ribeye rolls were priced mildly higher last week for what we’d call overall steady to just slightly higher for the rib primal. CAB tenderloins reached their year-to-date high with the heavy CAB tenderloins priced at $12.98 per cwt., adding 22½¢ for the week. Otherwise, strip loins and short cut loins were of little interest to buyers and saw significant discounting, the most negative price action for any subprimals that week.
On the chuck end of the carcass, the flat iron, teres major and chuck flap meat continue to roll out with good demand while other chuck items faltered and saw packers discounting them. The same applied to every round item; discounting and push lists were the theme there. Thin meats and CAB grinds were also cheaper with ground chuck and round continuing a predictable seasonal slide to lower prices while ground sirloin was about 30¢ higher than a year ago at $3.14 per pound, though still the lowest this year.
Editor’s Note: Paul Dykstra is a beef cattle specialist for Certified Angus Beef LLC.