In The Cattle Markets
Beef cutout values surge higher.
It’s not unusual for the cutout to increase during October, and that occurred again this year. The daily boxed-beef cutout value surged $5 per hundredweight (cwt.) during the week to $218.50, its highest value since June, to close out the week ending Nov. 2. USDA Choice beef is not the only quality grade to experience price increases as beef production grows seasonally.
Across-the-board gains
While the daily Choice beef cutout value is up about $15 per cwt. over the last month, the other quality grades have been increasing as well. The Select beef cutout value increased about $10 per cwt. during October. Normally, the Choice-Select spread increases in the fall, averaging about $13 per cwt. during the last five years. For the week ending Nov. 2, the Choice-Select price spread hit $17 per cwt., as Choice beef price gains outpaced Select values.
The other two quality grades of interest, USDA Prime and branded, also experienced gains through the month. Using weekly average reported values, the Prime cutout increased about $2.50 per cwt. during October. The branded-beef category includes all beef in branded programs that grade Choice. The branded-beef cutout value gained $6.19 per cwt. in October.
Among the primal cuts, across all quality grades, values increased the most for the primal rib. Value gains in the rib ranged from a $27.35 increase for Prime to a $12.98 increase for Select. Loin values increased for Choice and branded beef, while declining for Prime and Select. Brisket values increased across all grades, while showing the most increase in the Choice category. Short plates and flanks declined in value across all grades.
Available supplies
Continuing a trend of this year, a smaller percentage of cattle are grading Choice than a year ago. For the week ending Oct. 20 (the latest week available), 70.8% of cattle presented graded Choice, compared to 71.6% the same week the year before. For the same week, 8.9% of carcasses graded Prime, up from last year’s 7.1%. More graded Select, 17.4% this year vs. 15.3% last year.
When factoring in slaughter and weights, the grading data continues to indicate larger supplies of Prime and Select beef and a little less Choice than a year ago. It looks like steer slaughter is starting to pick up a little so we might expect growing beef supplies in the coming months, especially when considering more cattle on feed than a year ago.
Editor’s Note: David Anderson is a professor and Extension economist for Texas AgriLife Extension.
