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Market Update

The big picture on beef demand and higher market prices.

Cattle feeders in the week of Oct. 9 were able to push the market higher once again, with a market average of $111 per hundredweight (cwt.) and an increase of $1 per cwt. on the week. Packer margins are getting a bit more narrow, but are certainly large enough to encourage the kind of weekly production we’ve seen.


The big picture for not only beef, but pork and poultry as well, is that demand is impressive here in the fourth quarter even as production of each of those proteins is large. Carcass weights took a step back in the latest report, dropping 3 pounds (lb.) from 897 lb. to 894 lb. on the steers. That compares to 909 lb. a year ago and this year’s lower numbers tell us active cattle movement to packing plants is tempering the normal carcass weight increase run into November.


Cow-calf producers beginning to merchandise their spring-born calves at this time are being rewarded with a strong October market, unlike the same month a year ago: 600-lb. steer calves are bringing from $170 to $180 per cwt. (about $1,050 per head) in some cases, while 500-lb. calves are priced closer to $180 per cwt. and a bit higher ($900 per head). This should represent a very decent profit for the average producer, with annual production costs per cow-calf pair estimated in the range of $600 to $750.


Mid-October’s choppy up and down movement in boxed-beef prices ended with the overall beef complex essentially unchanged from the week prior. Predictably, the Certified Angus Beef® (CAB®) brand rib was the major mover among the primals with a lip-on ribeye roll priced at $8.02 per lb. in the spot market.


Two weeks ago we saw the price for that item well below each of the three prior years for the same week, but the quick, two-week spike now has the ribeye priced higher than any of the five previous years for the moment, while much upward trajectory remains likely through early December.


The only other measurable price movement across the CAB carcass last week is the tenderloin, which moved higher by 20¢ per lb. to average $10.35 per lb. on the defatted, lighter boxes or “down” product. Still, that’s at the low end of the price potential for that item moving toward the holidays. Briskets saw a little unseasonal price increase in the past couple of weeks as well, bumping up to $2.44 per lb. The chuck and round primals were a few cents cheaper on the week in limited price movement for any particular item, with ground beef items priced a bit weaker, as well.


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Editor’s Note: Paul Dykstra is a beef cattle specialist with CAB. Read more of Dykstra’s biweekly comments in the CAB Insider at www.cabpartners.com/news/cabinsider/.



 

 

 

 

 

 





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