Beef cutout values surge higher on strong demand

Among primal cuts, values increased most for primal rib.

Krissa Welshans 1, Feedstuffs Editor

November 9, 2018

2 Min Read
Beef cutout values surge higher on strong demand

It’s not unusual for the beef cutout to increase during October, and this has occurred again this year, according to Texas A&M AgriLife Extension Service professor and extension economist David Anderson.

Anderson reported that, during the week ending Nov. 2, 2018, the daily boxed beef cutout value surged $5 to $218.50/cwt., its highest value since June.

Further, he pointed out that Choice beef is not the only quality grade to experience price increases as beef production grows seasonally, he said.

“While the daily Choice beef cutout value is up about $15/cwt. over the last month, the other quality grades have been increasing as well. The Select beef cutout value increased about $10/cwt. during October,” he noted.

According Anderson, the Choice/Select spread normally increases in the fall, averaging about $13/cwt. over the last five years. For the week ending Nov. 2, however, he said the Choice/Select price spread hit $17/cwt. as Choice beef price gains outpaced Select values.

The other two quality grades of interest -- Prime and Branded -- also experienced gains through the month, Anderson noted.

Using weekly average reported values, the Prime cutout increased about $2.50/cwt. during October. The Branded beef category includes all beef in Branded programs that grade Choice. The Branded beef cutout value gained $6.19/cwt in October.

Among the primal cuts, across all quality grades, values increased the most for the primal rib, Anderson said.

“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,” he said.

Available supplies

Continuing a trend during this year, a smaller percentage of cattle are grading Choice than a year ago, Anderson noted. For the week ending Oct. 20 (the latest data available), of the cattle presented for grading, 70.8% 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 this year, at 17.4% versus 15.3% last year, Anderson said.

“When factoring in slaughter and weights, the grading data continue to indicate larger supplies of Prime and Select beef and a little less Choice than a year ago,” he said.

He also noted that steer slaughter appears to be picking up a little, which suggests growing beef supplies in the coming months, especially since there are more cattle on feed than a year ago.

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