Beef Prices Resulted In Robust Sales
Today we look at
the National Comprehensive Boxed Beef Cutout report by USDAís Agricultural
Marketing Service (Market News Division). It is a weekly report that compiles
data that includes not just cash (negotiated) product sold for delivery
within 21 days, but also formula transactions. The report is available
We begin by discussing
August values and then look at recent weekly volume data. The comprehensive
beef cutout value has five quality sub components: Prime, Branded, Choice,
Select, and Ungraded.
From December 2016
through June, the direction of beef cutout values was mostly higher. During
the last two months (July and August)
values have slipped.
For August, the comprehensive value dropped by $12.36 per cwt., or 6.0%.
However, the year-over-year decline was slight at $0.47 per cwt. (slipping
only 0.2%). Compared to a year ago., several of the cutoutís primal components
were stronger in August, including the Chuck, Round, Brisket, Short Plate,
and Flank. The largest percentage declines compared to a year ago were
for Loin, followed by the Rib primal.
For Prime (the highest
USDA Quality Grade), the cutout increased 9.9% in August compared to 2016ís,
posting the largest gain of any of the quality categories. Within Prime,
Augustís Rib value surged 25.3% from a year earlier. All the other quality
categories posted slightly lower rib values compared to 2016ís.
Within August, the
volume data in this report provided some insights. Prices dropped and sales
were robust. Thatís much better market action than when both prices and
tonnage sold decline. Each of the last four weeks had more product sold
than in the prior week. The volume during the last four weeks was larger
than any consecutive 4-week period since mid-September 2014 and was the
second biggest since late-June 2013. Beef packers required to report (large
firms that are covered by mandatory reporting legislation) showed loads
designated for export last week were the biggest since the week ending
February 24, 2017.
Further, buyers were
locking in products, as indicated by the loads sold for delivery more than
22 days into the future, which last week was the largest since the week
ending May 25, 2012.