While there have been some ups and downs, the Choice beef cutout has generally trended lower since it hit its peak back in June, according to David Anderson, Texas A&M AgriLife Extension livestock economist.
The weekly average peak in mid-June was $339.93/cwt. but the Choice cutout has averaged right at $300.00/cwt for the year, which Anderson says is 13.6% more than last year.
“While the cattle and calf markets have been on a wilder ride lately, the weekly cutout has ranged from $307.00 to $297.00 since mid-September,” he says. “Underlying the cutout value are individual primal cuts that have their own seasonality to them driven by holidays, changing seasons and supplies.”
The primal rib value hit $573.00/cwt. last week, the highest value of the year, and up from the $515.00/cwt. it reached the same time last year. Anderson explains that the primal rib typically increases this time of year heading into the holidays. Wholesale ribeyes have increased as well, hitting $13.46/pound last week, he adds.
The loin primal hit its typical peak at $495.95/cwt. back in mid-year, but Anderson says it has also been creeping up a little over the past few weeks. Last week it reached $388.14/cwt. Wholesale strip loins also peaked mid-year at $10.58/lb.
Primal chucks and rounds have fallen dramatically in value since the end of October, Anderson relays. The round declined from $271.00/cwt. to $230.00 last week. Over the same period, the chuck declined from $265.00 to $238.00. While lower, Anderson says they remain well above last year.
Much like the chuck and round, short plates and flanks have also declined sharply.
“The short plate has been on a remarkable run this year, from highs over $270.00/cwt. to $169.00/cwt. last week,” Anderson says. “In mid-year, the short plate was the third highest value primal following only the rib and loin. Flank values had a similar run this year, peaking mid-year at $234.00 before declining steadily to $131.00 last week. The flank is the only primal currently with a value lower than last year’s at this time.”
Overall, Anderson says the primal beef values are exhibiting their regular seasonal price behavior. “The middle meats, largely the rib, are increasing in value while the end meats are declining in value.”
For the year, each primal has averaged from 3.4% (brisket) to 15.1% (loin) more than last year.
Meanwhile in the markets, Anderson says beef cow culling has surged, with slaughter exceeding 80,000 head per week over the past two weeks, up from year-ago levels. This increased slaughter, he says, has contributed to seasonally lower cull cow prices, even though higher cull prices are encouraging more sales.
Anderson also notes that the Choice-Select spread continues to be historically wide.