Higher cattle prices are welcome (and overdue) news to ranchers as they are necessary to return to profitability following higher production costs. Higher wholesale beef prices are more difficult news to restaurants as they work to put together options that are competitively priced for their customers.
In this part of the world briskets are an important (or maybe I should say THE important) cut for BBQ restaurants. Higher prices are being reflected in price quotes from suppliers. In the broader wholesale market as reflected by the comprehensive cutout value only the short plate, flank, and loin have increased more than briskets this year. The primal brisket in the comprehensive cutout has increased 16 percent since the first of the year, from $2.12 per pound to $2.46 per pound. Smaller restaurants are likely paying higher prices due to small volumes.
Many small specialty BBQ restaurants source Prime or Branded program briskets. It is often the case that branded program briskets carry a premium over USDA Prime quality grade. That has reversed lately with Prime briskets carrying a premium over Branded program briskets ranging from $8.73 per cwt to $0.37 per cwt.
Higher prices are likely to continue to be felt by restaurant buyers as fed cattle and beef supplies tighten. Variation in the percent of cattle grading in each quality grade will add to price volatility. The percent of cattle grading Choice has been above a year ago, but declining slaughter numbers and weights mean that less is available. A smaller percentage of cattle have been grading Prime most weeks this year contributing to Prime’s premium over Branded products.