The Choice-Select spread has held $25 per cwt for the last five weeks, and been above $20 for nine weeks. Choice boxed beef has been relatively flat in 2021 stating between $255 and $275 per cwt for the last few months. Select boxed beef on the other hand has been declining in value over the better part of the year. The last several weeks have been flat hovering averaging between $240 and $250.
At least some of the change in Select boxed beef values can be attributed to larger supplies of select beef moving through the system. In the first quarter of 2022, select carcass made up under 14%. Since mid April, that number has risen to over 16% fairly consistently over June and July. Choice graded carcasses were averaging for 74% in the first quarter of this year but fell below 73% for most of April through June. The percent of carcasses grading Choice do typically fall during the 2nd quarter, before rising again in July. This year has followed a similar patter and in recent weeks the percent grading choice was back up to 74%.
The percent of beef grading prime has taken a large drop this summer falling from some rather high values over 10% earlier in the year to below 8% in July. The last two years have seen large increases in the carcasses grading Prime, and 2022 looks to be a bit of a reset year.
The increase in Choice beef availability may result in widening of the Choice-Select Spread as it did last summer, but that will likely be short lived as the seasonal pattern of Choice graded beef prices decline heading into October. Fourth quarter beef demand in the last few years has been nothing short of excellent. It will be interesting to see if that trends holds, as holiday meat selections tend to favor higher quality grades. Last year, the Choice-Select spread did decline over the fourth quarter in part because of larger supplies of Choice beef available.
Source: Daily Livestock Report - Steiner Consulting Group