Comparing cutout values across USDA quality grades and Certified Angus Beef® brand carcasses provides the quality pricing component of fed cattle values for grid and many formula sales.
Extreme January weather conditions impacting a large portion of cattle feeding regions have been widely impactful to cattle feeders and the beef supply chain.
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.
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.
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.
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.
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.
Shifting market dynamics are most succinctly summarized through two factors, fewer cattle and higher prices, that will further entrench themselves in near term trends.
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.
