To start 2023, USDA choice boxed beef prices are $14/cwt higher than a year ago meaning they are record high for the first week of any January in history. Not bad. Fed cattle prices are about $12 cheaper than the all-time high for early January set in 2015.

What’s interesting is that this is really the starting point for what will likely go down in history as a major bull market that will be compared to other big bulls in the past. Had it not been for the drought, this year would not be spun up to be such a major mover. But there was and it is. The sheer drop in both fed cattle supplies and feeder cattle supplies will make life difficult for packers and feeders, both battling with capacity utilization. They will also be battling for profits. Packers will fight trying to lose as little as possible while feeders wonder if the upside potential in cash prices can cover high priced feeder costs, cost of gains and lost operational efficiency.

So it may seem like the market is starting 2023 at ‘high prices’, but much higher prices are coming. Higher prices are on tap for consumers, grocers, food service too. It is highly probable, given the proven record beef demand for the last two years, that wholesale boxed beef values will spend more time near $300/cwt in the next 24 months than $250/cwt.

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'The Beef' is published by Consolidated Beef Producers