Beef Market Remains Strong, Most Prices Up

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By Mike Miller, Cattle-Fax

Whether it’s been the beef market pulling the cattle market or the cattle market pushing the beef market or some combination, the result is a strong market.  Many beef items are trading at levels substantially higher than year earlier levels and some are approaching, if not reaching, 2003 levels.

The Choice cutout is currently trading 12 percent higher than year ago levels while the Select cutout is up about 6 percent.  The improvement is evident throughout the carcass as the Choice rib primal value is up nearly 20 percent and the Choice loin primal is up 15 percent.  The Choice chuck primal is up 8.4 percent while the round is up 7.6 percent.

Certain trim values are the only part of the carcass that are lagging year earlier levels as 90 percent trim is off 7 percent but 50 percent trim is up more than 20 percent.

Item- November 10             2005       2004          2003

Choice cutout                        1.52        1.35           1.66

CH 112A ribeye roll              5.86        4.76           6.58

CH 114A shoulder clod         1.58        1.42           1.45

CH 168 inside round             1.72        1.56           1.84

CH 180 0x1 strip loin            5.00        3.97           4.74

CH 189A tenderloin              9.77        8.16         14.35

90 percent lean trim               1.27        1.37           1.25

Bottom Line:  The stronger market can be attributed in part to a whole host of factors but they likely include:  strong demand for Choice middle meats, a wide Choice/Select spread, a lower percentage of Choice grading cattle compared to a year ago, and seasonally tighter fed-cattle supplies.

Other factors could include slightly smaller beef import totals from Canada due to the plant strike and some impact from the constant news coverage of avian influenza.  

Whatever the reasons, in the past four weeks beef production is up nearly 2 percent compared to a year ago and fed-cattle prices are up 5 percent at the same time.  Demand must be pretty good.