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