Choice beef cutout values climed to levels last week unseen since last June, helping to lift cash fed cattle prices and cattle futures.

Wes Ishmael

October 20, 2012

2 Min Read
Fed Cattle & Wholesale Beef Prices Move Higher

Cash fed cattle sales rode the coattails of suddenly stronger wholesale beef demand last week.

Live sales Friday were $2.00-$2.50 higher than the previous week at $125-$128. Dressed sales in the Northern Plains were $3-$4 higher at $198.

“Many packers were short-bought last week, so they had to pick up a few head this week,” says Andrew P. Griffith, University of Tennessee agricultural economist, in his Friday market comments.

Griffith explains the peak fall fed cattle price is typically about 13% higher than the summer low. Prices were 11.5% higher than the summer low in mid-September before they began heading south again.

As for wholesale values, the daily Choice cutout value was $5.01/cwt. higher week-to-week, closing Friday at $196.68, getting precariously close to the $200 level that consumers have so far resisted. The Select daily cutout value was $3.41/cwt. higher week-to-week.

In broader terms, market analysts with the Texas Cattle Feeders Association noted Friday, “The most recent Comprehensive Boxed Beef Report (weekly) showed a value of beef at $187.10, a full $1.10 better than the previous week, 19% above the five-year average and 5% above the same week a year ago.”

By way of reference, the folks at the Agricultural Marketing Service explain, “…the Daily Choice and Select Cutouts are driven by the spot market only (negotiated sales for delivery within 21 days); …the weekly comprehensive cutout value is based on all boxed beef sales (negotiated and non-negotiated) and combined into a single average carcass cutout value; …the Choice and Select cutouts from the weekly comprehensive report includes the spot market, as well as formula and contract sales, along with export sales and negotiated business done out front.”

“Much of this support is coming from holiday purchases and the increase in beef demand as the weather cools,” Griffith says. “The Choice cutout value has not been at this level since the last few weeks of June.” He emphasized comments he made earlier this month: “…the export market will be what either drives the market to news levels or what leaves the market in its current state.”

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