At the Feeding Quality Forum in August, the brand’s Meat Scientist Daniel Clark, Ph.D., and Director of Product Solutions Clint Walenciak pulled back the curtain on factors that limit eligible steers and heifers from qualifying for CAB.
Strong ribeye demand has had heavy influence on cattle values for feeders selling on a grid or carcass value formula. Just as Prime quality grade premiums held much higher than expected late this summer, the Choice/Select price spread has popped back up within reach of record territory once again in recent weeks.
While the entire CAB carcass is charting new territory at record highs for this time of year, the price direction of ribeyes is defying the seasonal trend to an amazing degree.
Lately the Prime grade has slipped down to 8.3% of the total, versus 9.5% a year ago. The reduced slaughter pace, combined with this lower Prime share, has prices heated up for the most premium quality grade.
Beef demand continues at such a solid pace that it seemingly defies logic, with the CAB cutout value now 41% higher than a year ago. Beef buying ahead of Labor Day has proven stronger than high prices suggest it should be.
This summer many of us have had our eyes on carcass weights, grading trends and days on feed as they relate to the fed cattle sector. These factors have been set on abnormal paths since the onset of the pandemic and accompanying backlog over a year ago.
At last, the perfect storm occurs. On average, annual peak demand for highly marbled middle meats happens at the same time that the supply of those carcasses is near annual lows.
Today’s fed cattle market is the epitome of finding a silver lining. On one hand, the vast majority of cattle producers aren’t as hoped compared to the demand seen on the consumer side. There is much desire for your product and packing sector throughput is mostly unable to match supply or demand.
As we look at demand for Select beef, it’s important to realize supplies have dramatically decreased. Price and volume are the two drivers that define demand.
The cattle business year in review is painted primarily with COVID-19 irregularities. A year ago few could have imagined the more widespread and lasting pandemic impacts that lay in wait.
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