From a beef demand perspective, nothing is normal as we are just a week removed now from all-time cutout highs. However, end-users are still buying what beef they can and consumers are generally clearing meat case inventories.
The challenges presented now are very important to cattlemen and brand partners up and down the chain. However, the health of people at the packing level and throughout the country is the priority that must receive full focus and priority.
The many challenges the beef market is facing today are serious short term problems but are not indicative of long term trends. Price and demand signals will also realign as the pandemic subsides. The interrupted flow of cattle and boxed beef has implications now impacting the pricing structure on a carcass value basis.
One does not need to look far to see the gyrations that COVID-19 has brought to the beef supply chain. Many end meat whole muscle cuts and trim also find their way to the in-store grinder to fulfill America’s propensity toward ground beef consumption.
As many Americans are scrambling to find a new normal during the COVID-19 crisis, restaurants are being forced to find creative ways to keep food moving as dine-in is ceased. Meanwhile, retailers are scrambling to find beef to put in the meat case. Many CAB partners are lending helping hands.
Seasonal factors are impacting the CAB carcass headcount. Feeders have older, heavier cattle and more in the yard, lending to a higher supply while CAB acceptance is staying at a steady 36%.
CAB continues to pay producers who target the brand. Up to $92M in 2019 was paid back to feeders and producers. Steer and heifer carcass weights are at record highs, averaging 904 lb. the first six weeks of 2020.
This year has started out with record highs for fed steer/heifer carcasses grading Prime. How much will the market demand and at what premium can it support? We haven’t reached the ceiling yet.
Cattlemen always try to lower cow cost while improving returns. Paul shares what pays in your cow herd and why you want above average cows to hold onto. CAB premiums averaged $116/cwt. in 2018 and 2019.
The passing of December holidays signals the end of late-year market popping demand for marbling-rich middle meats. Carcass cutout values for those items shift back towards normalized levels with notable seasonal changes.
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