2018 Review: Cutout vs. Dressed Beef Price
2019 predictions are not for the faint of heart.
Heading into a new marketing year, cattle feeders have a firm starting price position, most recently a $123-per-hundredweight (cwt.) live-cattle weekly average, just about a dollar ahead of the first week of 2018. Feedyard leverage was paltry in 2018, the third such year in the dwindling phases of the rapid cow herd expansion.
As seen in the table, the comprehensive cutout price (wholesale subprimals calculated on carcass value) advanced 2% over 2017 while dressed, delivered steer-carcass prices suffered a 4% setback in the USDA data. Packers pushed head counts through their plants at all possible speed, posting some record head-count weeks as Saturday shifts maximized returns under restricted labor availability.
While beef demand has been strongly supported with exports as the “darling” of the past 12 months, fed-cattle prices are predicted lower again in 2019. Thus, basis steep price competition from record total protein supplies and approximately 1% more fed-cattle numbers. Predictions are often unreliable, but the year ahead will not be for the faint of heart.
Editor’s note: Paul Dykstra is a beef cattle specialist with CAB. Read more of Dykstra’s biweekly comments in the CAB Insider at https://bit.ly/2FsInFp.
