Market Trends - Beef: Feb/Mar 2018
Choice beef cutout has been above 2017 levels so far this yr, ranging from $2.06 - $2.10/lb. from Jan thru early Feb. and was $2.08/lb., up 10% for the wk ending Feb 9. The Choice/Select spread was $0.05/lb, up from the $0.02/lb for 2017. The wk ending Feb 9, wholesale values were up for Choice briskets ($1.79, +29%), ribs ($3.26, +14%), chucks ($1.76, +13%), flanks ($1.17, +8%), loins ($2.68, +7%), short plates ($1.46, +6%), and rounds ($1.75, +5%).
Ribeyes ($6.80, +14%) have been up since late Jan and remained above 2017 and the 5-yr avg; loin cuts were mixed—higher for tenderloins ($9.30, +3%), ball tips ($2.53, +9%), & top sirloin ($3.32, +26%), but lower for NY strips ($5.10, -2%) & tri-tips ($4.28, -8%).
Values for flank stks ($4.87, +7%), teres major/shoulder tenders ($5.12, +34%), briskets ($2.58, +29%), & top blades (flat iron) ($3.32, +19%) were higher yr-o-yr with export cuts stronger vs yr ago, with rib short rib ($5.18, +15%), chuck short rib ($3.38, +9%), chuck roll ($3.04, +28%), chuck shoulder clod ($2.11, +12%), and top/inside round ($2.11, +9%) all up. Wholesale values for 50% trim were trending higher in early Jan, but dropped the wk ending Feb 9 at $0.84/lb., up 8% yr-o-yr.
Cash steer prices have been above yr-ago levels since late Sept of 2017. For the wk ending Feb 12, cash steer prices were up 7% from last yr at $1.28/lb. Live cattle futures contracts are up since Jan (Feb 15 CME Live Cattle Futures closing prices with change from Jan 8): Feb: $129.28 (+$12.05), Apr: $127.25 (+$9.95), & Jun: $118.60 (+$7.40).
In 2017, fed beef production increased by 3.3%, and Choice beef production increased by 5.9%; but thru Jan 2018, fed cattle production was up 1.8% yr-o-yr, and Choice was up 0.8%. To date, 7.5% of fed cattle graded Prime, 72.4% Choice, and 17.2% Select compared to 6.3% Prime, 73.2% Choice, and 16.4% Select yr-o-yr.
USDA’s semi-annual cattle inventory report (end of Jan) gave total cattle & calves, beef cows, and calf crop to be the largest since 2009; total inventory was 94.4 mill hd, up 1% from last yr; beef cows were 31.7 mill hd, up 2%; the calf crop was 35.8 mill hd, up 2%; replacement heifers were down 4% at 6.13 mill (indicating herd expansion has slowed); and cattle on feed was up 7% and was the highest since 2012. USDA’s Feb forecast is for beef production to be record large in 2018. Production is expected to be up 5.9% to 12.58 million metric tons, after production increased by 3.8% in 2017 to 11.87 million metric tons.
SOURCE: USMEF
