The breakaway amount of Prime beef carcasses is beginning to swamp demand.
There’s no question that carcass weights were significantly lower in January than they would have been given a more typical weather pattern for the month.
The fed cattle market over the past two weeks has declined $3/cwt. from the January high of $124/cwt.
The share of Prime carcasses has more than doubled in the past 5 years, spelling greater availability and consequential wider usage among end users.
The cash market for fed cattle last week gave some relief to feeders and overall market sentiment in the wake of the prior week’s $5/cwt. decline.
A deeper look at the Prime quality grade reveals a year-to-date (YTD) jump from 6% in ’17 to 8% as we compare the first 16 weeks with 2018.
Looking forward, some may question whether feedyards will continue to take cattle to the same days on feed for their grid or formula-bound pens in 2019 as they did a year earlier if the lower Prime value continues.
Last week’s trade featured what cattle feeders hope is a trend reversal, with a $1 to $2/cwt. increase across major feeding regions.