CAB Insider: Nov. 4

In recent weeks, average cash fed cattle prices have found a higher range slogging through the upward recovery seemingly necessary following the rout, with prices dropping precipitously from $235/cwt. in the first week of August to $219/cwt. three weeks later. The more recent range has been bidirectional, with averages spanning $224/cwt. to $228/cwt.

Regionally, the range has been more dramatically spread as Iowa/Minnesota steers sold from $218/cwt. to $225/cwt. At the same time, the recently expanded “South Central” combined regional report shows a wide $220 to $230/cwt. price chasm.

As record-large carcass weights hit the USDA ledger for the week of Oct. 11, the anticipated increase toward the annual fall weight highs received an early shot in the arm. The single-week, 8 lb. jump to 994 lb. in steer carcass weights took out last March’s record high by a margin of 5 added pounds per head.

(Certified Angus Beef)

Volatility in Live Cattle futures sent contract prices careening lower beginning last Wednesday, culminating in $14 to $15/cwt. declines as of this Wednesday. Neither weaker boxed beef cutout values nor record carcass weights equate to enough bearish impetus to turn the market as forcefully lower as what has transpired. Heavy carcass weights tend to imply a lack of currentness in the feedlot sector, yet forecasted fed supplies into early 2027 indicate smaller head counts ahead.

The boxed beef market reveals the absence of a mid-October price rally such as those seen in recent years. Elevated weekly harvest totals, plus average fed cattle carcass weights 18 lb. heavier than a year ago, have held net boxed supplies higher for the period. Seasonality has kept ground beef prices on a lower trajectory, and both 50% and 90% lean trim have found softer prices. Chuck and round items are pricing steady to weaker, with several round cuts at or below year-ago prices. Ribeye prices have weakened modestly but remain quite high with 4th quarter demand in full effect, holding value for small spot market available supplies at the top of the expected range. The loin primal cheapened last week, but strip loins are near last year’s price for this period. Certified Angus Beef tenderloins at wholesale are a valuable item at $16.95/cwt. last week, yet much lower than their sky-high $20/cwt. valuation from a year ago.

Record Weights Support Fed Cattle Decline

Escalating fed cattle weights simply cannot be overlooked in the beef supply equation. Finished cattle weights, harvest throughput and feedlot currentness don’t have the same relationship today as they did just a few years ago.

A new record-high steer carcass weight was recorded for the week of Oct. 11, setting the average for the week at 994 lb., 5 lb. heavier than the prior record high from last March. Yet, looking back to 2024, we see the start of a divergence between the number of cattle harvested and total hot carcass weight. After a brief re-set to lower average carcass weights following the pandemic disruptions, annual average weights have climbed a total of 68 lb. in three years.

From a cattlemen’s perspective this may raise questions, considering that increased tonnage would logically decrease prices. Yet record-high fed cattle prices recorded last May indicate that increased production per head has not simultaneously depressed prices. In fact beef demand this year has continued to outperform many expectations at higher retail price levels.

Keeping beef at the center of the plate is key to maintaining consumer demand. Doing so requires that beef is, first and foremost, the preferred protein as a matter of taste and overall eating satisfaction. Second, supply needs to be abundant enough that U.S. consumers can afford to purchase their average 59 lb. annual per capita consumption. Heavier weights have directly and indirectly addressed both issues. Added production per head is self-evident, but added feedlot days have elevated carcass marbling as an indirect byproduct of the trend to push more weight per shackle at the packing plant.

(Certified Angus Beef)

So far this year, weekly fed harvest throughput has trailed 2025 by 6.7%. Yet calculated fed carcass tonnage has been held a bit higher at just a 3.9% deficit. At the same time, the quality mix shift has been so significant that USDA Prime carcass tonnage is 25% greater than a year ago. Undoubtedly there are many more YG 4 and 5 carcasses in that mix than ideal, on the negative consequence side of the ledger.

The surge in Prime volume did pull the price premium for those carcasses much closer to the Choice price for many weeks this year. This is especially true as compared to 2022 to 2023 when supplies were not as robust. Current seasonal demand for middle meat saw the Prime cutout premium widen again to a more familiar $40/cwt., wholesale. This is impressive given the significant increase in Prime carcass tonnage that’s come about simultaneously. On a cut-by-cut basis, however, heavier carcass weights don’t do much to increase the number of tenderloins available as head counts decline.

This month’s CattleFax analysis pins the Prime Cutout Demand Index as the highest among the quality grades, including USDA Choice and Select. In fact, Prime demand has charted a course several points higher than the previous three years. This is far and away the most improved of the three, with USDA Select demand devastatingly lower, even as Select carcass tonnage is 31% smaller, year to date. Consumers continue to respond to the most quality-rich product mix the beef supply chain has ever offered them.