Signs Of A ‘Current’ Fed-cattle Supply
Feedyards are staying on top of their marketings while realizing lighter weights than they’d projected.
Historically we see the proportion of Choice and higher quality grade carcasses in the mix tend to bottom out for the “spring low” in the trend line this time of year. That’s upon us with the percent Choice grade for the week of May 20 dipping to 69%, recovering to 70% the following week, but remaining 1 percentage point lower than a year ago for two weeks now. Texas cattle are the leanest by far with a 62% Choice, 3.8% Prime, for a combined Choice and Prime total that’s 3.5 percentage points below a year ago for the state.
Similar to the Choice trend, the national Prime grade share is down to 7.18% from the 10% range seen in early March. However, Prime carcasses remain almost 1 percentage point higher than the same week last year, in contrast to the Choice grade slipping below last year’s figure. The share of carcasses accepted as Certified Angus Beef® (CAB®) brand is running in the 35% range in the May production estimate, up 2.5% vs. May 2018.
Coinciding with the lower grades, fed-cattle carcass weights are finding an even lower spring low than a year ago, with the USDA estimate for combined steers and heifers at 822 pounds (lb.) for the week of May 22, 5 lb. lower than last year.
All of this information points to a very current cattle supply, as feedyards are staying on top of their marketings while realizing lighter weights than they’d projected, thanks to lingering effects from the winter. The end-user appetite for higher-quality product hasn’t waned. There’s potential for stronger quality spreads as the Prime-Choice cutout spread has increased by $5.64 per hundredweight in mid-June.
Editor’s note: Paul Dykstra is a beef cattle specialist with CAB. Read more of Dykstra’s biweekly comments in the CAB Insider at http://bit.ly/CABInsider612.
