Wholesale beef prices through mid-April were tracking closely with last year’s levels, leading many market participants to prepare for significant price inflation going into the grilling season. The inventory of beef cuts in cold storage at the end of March was 54% higher than the previous year. But if the cure for high prices is high prices, then call the current market cured. The choice beef cutout on Friday was pegged at $254.44/cwt, $19/cwt or 7% lower than three weeks ago.

Current prices are about 16% lower than a year ago but sell as much as 15% higher than in 2019. Beef prices are down across all segments but the decline in the value of the rib primal has been the most significant and the most consequential.

Since April 12, the rib primal value has declined by almost 12%, accounting for almost a third of the overall decline in the value of the choice beef cutout. Is the price decline a result of retailers putting on fewer features after Easter and also planning fewer features for Memorial Day? Or does it reflect a slowdown in demand as high fuel prices and overall price inflation takes a toll on consumer finances?

With the limited data available so far, we are leaning more towards the second but it is hard to say with certainty. USDA publicly available grocery store feature data suggests that for the week ending May 6 features of bone‐in rib roasts and boneless rib steaks were higher than a year ago (although lower than in 2019) while retail rib prices were at or slightly under what they were last year. It appears to us, and we will need to wait for all of Q2 data to be available, that overall demand appears to have shifted down to more reasonable levels. Last year the combination of significant government money infusion and COVID pent up demand resulted in dramatic price appreciation.

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