This column has repeatedly focused on the influence of COVID-19 in recent months. That’s resulted in coverage on various topics, including emphasis on the beef cutout trends and specifically, the surprising strength in wholesale beef values. Meanwhile, last week’s column highlighted the resilient premium for Prime on the wholesale side.
This week’s illustration provides a third look at the wholesale market, albeit from a different perspective. It details the relative contribution of middle meats (rib and loin) versus end meats (chuck and round) to the weekly Choice cutout.
Not surprisingly, the relative contribution swapped positions with the shutdown of food service. But the swap in values was short-lived; wholesale beef prices have since returned to normal with renewed divergence between rib/loin versus chuck/round values.
Most important amidst this discussion – and previous columns – it’s all occurred despite the overwhelming deficit of food service sales. In other words, retail pull is making the difference and has been exceedingly important underpinning these trends. Consumers are actively purchasing beef at the retail level – especially at the top end of the market.
As noted last week, the inherent question going forward surrounds the durability of this trend. Is this a structural change that will endure? That remains to be seen but given some of the consumer data provided in last week’s column, there’s evidence this might solidify into a longer-running trend.
In the end, the beef industry’s resilience at retail during the COVID-19 pandemic underscores the importance of previous work surrounding beef demand. Beef Checkoff investment in research and promotion, coupled with huge advances in beef quality and consistency, have paid great dividends. And post-COVID-19 may prove to separate beef even farther from the rest of the protein pack.
Nevil Speer is based in Bowling Green, Ky. and serves as director of industry relations for Where Food Comes From (WFCF). The views and opinions expressed herein do not necessarily reflect those of WFCF or its shareholders. He can be reached at [email protected]. The opinions of the author are not necessarily those of beefmagazine.com or Farm Progress.
