Latest News From Paul Dykstra

CAB Insider: Quality Grades Diverge
CAB Insider: Quality Grades Diverge

Extreme January weather conditions impacting a large portion of cattle feeding regions have been widely impactful to cattle feeders and the beef supply chain.

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CAB Insider: Carcass Weights to Plunge, Quality to Remain

The onset of severe cold temperatures and snow in a broad spectrum of cattle feeding regions will pull fed cattle production down. Beyond the reduced weekly slaughter head counts, carcass weights are set to plunge.

CAB Insider: Carcass Quality Set to Climb Seasonally
CAB Insider: Carcass Quality Set to Climb Seasonally

The beef market is set to rapidly adjust to changes in consumer buying habits. This removes demand pressure from ribs and tenderloins, realigning the contribution of those cuts to a smaller percentage of carcass value.

CAB Insider: Carcass Premium Spreads Continue Strength
CAB Insider: Carcass Premium Spreads Continue Strength

The shift to tighter fed cattle supplies and smaller slaughter head counts pushed year to date (YTD) fed cattle prices up 22% on average for the year.

CAB Insider: Carcass Weights Hit Record Highs
CAB Insider: Carcass Weights Hit Record Highs

Few things in cattle market trends are entirely predictable but the fact that carcass weights peak in November is as close to a sure bet as one could identify.

CAB Insider: Credit End Meats With CAB® Value-Add
CAB Insider: Credit End Meats With CAB® Value-Add

Rib and tenderloins are pricing near their annual highs, but a look at annual price trends across the beef carcass shows increasing contributions to CAB premiums from both ends of the carcass.

CAB Insider: Middle Meats and Supply Driving Fourth Quarter Spreads
CAB Insider: Middle Meats and Supply Driving Fourth Quarter Spreads

Cash fed cattle prices have increased 4.8% during the month of November in the past five years, yet carcass cutout values have begun the month in a bit of defensive pattern.

CAB Insider: Sales Third Best in 45-Year History
CAB Insider: Sales Third Best in 45-Year History

Shifting market dynamics are most succinctly summarized through two factors, fewer cattle and higher prices, that will further entrench themselves in near term trends.

CAB Insider: Feedyard Insights Bring Focus to Profitability
CAB Insider: Feedyard Insights Bring Focus to Profitability

Procurement decisions by feedyards are heavily influenced by vaccination status and current health condition. An “Industry Insights” report from CattleFax and Angus Media provides useful insight on current trends.

CAB Insider: Carcass Weights Surge, Choice Grade Setback
CAB Insider: Carcass Weights Surge, Choice Grade Setback

While the market average trading range has narrowed from the recent historically wide range, the total market average in the six-state region has priced in a fairly tight range in the low to middle $180’s since June.

CAB Insider: 90% Lean Trim Drives Round Primal Value
CAB Insider: 90% Lean Trim Drives Round Primal Value

America’s shrinking cow herd has generated sharp packer interest for the smaller pool of cows aggressively culled in drought regions leading to record high cutter cow carcass values.

CAB Insider: Short Supplies, Higher Beef Prices
CAB Insider: Short Supplies, Higher Beef Prices

In the waning days ahead of Labor Day spot market beef prices are posting positive numbers, boosting a bit of optimism into the total beef complex.

CAB Insider: CAB Supplies Up Amidst Lower Fed Cattle Totals
CAB Insider: CAB Supplies Up Amidst Lower Fed Cattle Totals

In the second quarter of 2023, national average carcass quality grades held up especially well considering that carcass weights were 15 to 20 lb. lighter than a year ago in the first quarter.

CAB Insider: Cutout Values Responsive to Conditions
CAB Insider: Cutout Values Responsive to Conditions

Cash fed steer prices reached record highs two weeks ago, and the trajectory – fueled by strong demand and restricted head counts – was predestined to hit the seasonal ceiling.

CAB Insider: Lighter Carcass Weights and Shrinking Supply
CAB Insider: Lighter Carcass Weights and Shrinking Supply

Moving forward, lower quality grades in May and lighter carcass weights combined with shorter fed cattle supplies may be expected, driving premiums into the high-quality cattle and beef markets. 

CAB Insider: Value Cuts and Thin Meats Lead
CAB Insider: Value Cuts and Thin Meats Lead

A broad view of recent carcass cutout values shows plenty of strength in wholesale boxed beef prices. To contrast current values to a year ago, CAB and commodity Choice cutouts are 14% higher.

CAB: Mindful Breeding of Heifers on Hand
CAB: Mindful Breeding of Heifers on Hand

As you’re contemplating the future impact of today’s genetic decisions, consider the marketability of both feeder calves and potential replacement heifer progeny.

CAB Insider: Winter Performance Impact
CAB Insider: Winter Performance Impact

Plowing headlong into spring we’re now observing the impacts of not only smaller weekly slaughter but lighter carcass weights in the north.

CAB Insider: Seasonal Quality Grade Highs Likely Already Posted
CAB Insider: Seasonal Quality Grade Highs Likely Already Posted

With current fed cattle carcass weights 16 lb. lighter than a year ago marbling achievement, on average, is likely to underperform in contrast to the past two years.

CAB Insider: Quality Holds Up Under Lighter Carcass Weights
CAB Insider: Quality Holds Up Under Lighter Carcass Weights

From a cash price perspective, both cattle and beef markets continue on a relatively bullish run the past few weeks. Meanwhile, winter weather has hindered feedyard performance this season.

CAB Insider: Cattle Contracts Library Kicks Off
CAB Insider: Cattle Contracts Library Kicks Off

The combination of smaller slaughter totals and lighter carcass weights across all cattle classes have pushed boxed beef values sharply higher.

CAB Insider: Calm Before the Storm
CAB Insider: Calm Before the Storm

From a cattlemen’s perspective fed cattle prices have been "just good enough" since the first of the year, only showing some spark as recently as last week with the nearly $3/cwt. move.

CAB Insider: Fed Cattle Projections Factor in Carcass Value
CAB Insider: Fed Cattle Projections Factor in Carcass Value

Focusing on carcass quality can allow feeder cattle buyers to factor in higher returns based on better-than-projected feedlot performance and/or carcass quality premiums than average.

CAB Insider: Cattlemen Will Continue to Reap Quality Rewards in 2023
CAB Insider: Cattlemen Will Continue to Reap Quality Rewards in 2023

Diving into 2023, the much-discussed beef cow herd culling comes home to roost, bringing on a supply challenge for the beef industry.

CAB Insider: Rib and Tenderloin Defy Gravity
CAB Insider: Rib and Tenderloin Defy Gravity

The CAB carcass cutout price has remained resilient into the middle of December, giving up only $5.41/cwt. or 1.9% in the past month.

CAB Insider: Demand for Premium Quality Beef High, Supply Showing Improvement
CAB Insider: Demand for Premium Quality Beef High, Supply Showing Improvement

Cattle feeders capitalized on a tighter supply of market-ready cattle last week, while packers came back with sharply higher bids as they competed to own inventory needed to fulfill boxed beef sales commitments.

CAB Insider: Tight Cattle Supplies and Increasing Carcass Weights
CAB Insider: Tight Cattle Supplies and Increasing Carcass Weights

Today’s weekly slaughter is much more robust than in 2015 and cattle supplies are at least adequate for the short term. Yet fed cattle numbers will certainly tighten as we move into 2023 due to the shrinking cow herd.

CAB Insider: CAB Refines Hot Carcass Weight Specification
CAB Insider: CAB Refines Hot Carcass Weight Specification

Through a consistent premium beef experience, the CAB brand provides economic incentives to cattlemen up and down the supply chain. The brand has adjusted the hot carcass weight (HCW) maximum to 1,100 pounds.

CAB Insider: CAB Brand Sales Second Largest on Record
CAB Insider: CAB Brand Sales Second Largest on Record

At the conclusion of our fiscal year it’s exciting to report the rebuilding of CAB product sales following two challenging supply years.

CAB Insider: Texas Grade Tumbles
CAB Insider: Texas Grade Tumbles

Following beef quality grade trends may not be as exciting as college football, but for beef marketers quality grade is the game and this season is nothing short of dynamic.

CAB Insider: Will Quality Premiums Continue Higher?
CAB Insider: Will Quality Premiums Continue Higher?

Late fall holiday demand heats up the cattle market, and that’s when high-quality carcasses get extra bragging rights. Demand alone doesn’t spur prices higher, there must be a degree of supply constraint.

CAB Insider: Corn Basis Factors
CAB Insider: Corn Basis Factors

Even though prices have been exceptional for calves and feeder cattle, feedlot breakeven projections are rapidly moving higher, discouraging ranchers to consider retaining ownership.

CAB Insider: Premium Beef Remains in Fashion
CAB Insider: Premium Beef Remains in Fashion

More Select grading carcasses and fewer Prime goes against what beef customers desire. To offset this drop, end users have adopted a new chilling method to increase reserves before prices soar.

CAB Insider: Carcass Weights Find Annual Low
CAB Insider: Carcass Weights Find Annual Low

Reviewing cattle placement in feedlots this year suggests that fewer fed cattle supplies expected in the fourth quarter along with much higher costs of gain will hold carcass weights below a year ago.

CAB Insider: Strong Finish to June Cutout Values
CAB Insider: Strong Finish to June Cutout Values

Fundamentals for fed cattle are steadily at odds so far this summer with very “green” fed cattle in the northern tier of the feeding region. Feeders are pushing show lists to take advantage of the summer high.

CAB Insider: Prime Premium Reflection
CAB Insider: Prime Premium Reflection

Consumer concerns with inflation are quite real and retail beef values closed out the first quarter 15% higher than last year. Even so, the end user beef market has gained a widening appreciation for Prime beef.

CAB Insider: Currentness Picks Up in The Fed-Cattle Sector
CAB Insider: Currentness Picks Up in The Fed-Cattle Sector

Carcass weights in the latest USDA report for the week of May 9th show a large seven pound drop for steers and 10 pounds lighter on the heifers. This suggests currentness has picked up in the fed-cattle sector.

CAB Insider: Feedlot Fundamentals Challenge Summer Quality Grades
CAB Insider: Feedlot Fundamentals Challenge Summer Quality Grades

The cattle placement pattern beginning in the fourth quarter of 2021 shows the finished cattle supply will start to swell in June and could become a 20,000 head surplus over a year ago.

CAB Insider: Will the Prime Market Heat Up?
CAB Insider: Will the Prime Market Heat Up?

The coming weeks should fuel interest in high-quality beef cuts for grilling. As the share of harvest-ready calf-feds grows in the fed cattle supply, we anticipate seasonally lower quality grade trends.

CAB Insider: Weights and Grade Trends
CAB Insider: Weights and Grade Trends

Cattle feeders have been more willing to sell finished cattle in recent weeks since corn prices have elevated the ration cost and feed conversion efficiency decreases at the end of the feeding period.

CAB Insider: CAB Premiums Record High in 2021
CAB Insider: CAB Premiums Record High in 2021

In 2019 Certified Angus Beef reported an aggregate packer CAB premium total of $92 million. By 2021 that total was nearly double, resulting in $182 million in CAB premiums.

CAB Insider: Carcass Quality Ramping Up
CAB Insider: Carcass Quality Ramping Up

Quality grades set record highs for combined Choice and Prime carcasses during the first five weeks of 2022, slightly higher than last year. Prime grades are down marginally from year-ago at 10% vs. 10.8% last year.

CAB Insider: Prime Grade Prompts Attention
CAB Insider: Prime Grade Prompts Attention

The slaughter pace last week was the best we’ve seen in 2022, with an estimated Federally Inspected total of 659K. Given the previous week’s disappointing pace due to weather, these are very promising totals.

Look Back and Learnings from the 2021 Cattle Market
Look Back and Learnings from the 2021 Cattle Market

Considering the production factors of the past two years, it’s logical to consider that advances in carcass quality, or higher marbling scores, will be less likely to develop in 2022 than in the previous two years.

CAB Insider: 2022 Cow Herd Implications
CAB Insider: 2022 Cow Herd Implications

Regardless of the market examined, "uncertainty" is an accurate descriptive term. U.S. equities are unsettled despite a promised interest rate hike and that spills over to cattle and beef.

CAB Insider: Cow Herd Implications
CAB Insider: Cow Herd Implications

The USDA January 1 cow herd inventory, published this Monday, confirmed a 2% decline in the beef cow herd, along with a 1% decline in feeder cattle supplies.

CAB Insider: Slow Slaughter Impacts
CAB Insider: Slow Slaughter Impacts

Fed cattle markets have seen challenges in January. The Omicron variant is pressuring packing plant efficiency through increased worker absence, resulting in much smaller slaughter totals so far this month.

CAB Insider: Carcass Premium Structure Advanced in 2021
CAB Insider: Carcass Premium Structure Advanced in 2021

Cattle and beef market dynamics the past year were nothing if not volatile, and in some ways, unprecedented. Supply chain imbalances and processing sector issues have been the focal point of beef price inflation.

CAB Insider: A Look ahead At Early 2022 Dynamics
CAB Insider: A Look ahead At Early 2022 Dynamics

December has started off on a high note in the fed cattle sector and all of us on the cattle side of the supply chain should be made well aware of what’s ahead in 2022.

CAB Insider: Heifers Topping Out In Fed Slaughter
CAB Insider: Heifers Topping Out In Fed Slaughter

Packers have margin to spread back upstream to the feedlot sector at their discretion, and it appears that their need to fulfill orders for high-quality product for upcoming holidays is likely a motivating factor.