The CAB brand is looking to reach 2 billion pounds of certified product. In order for this to happen, supply must increase. The brand is looking to producers to help grow supply with more Angus-influenced genetics, increasing CAB acceptance rates.
With increased boxed product supplies comes a strong demand from the buying side to secure previously scarce supplies. These days, price is more favorable for end users. Fed cattle supplies are overwhelming and packer margins still leave room for boxes to be marked cheaper on larger production volume.
Federally inspected headcounts have seen rapid recovery since the lows experienced in April. For the past two weeks, the FI harvested headcount has been 86% and 89% of the same two weeks a year ago. Fed cattle prices have remained steady, averaging $116/cwt., with carcass weights steadily creeping higher.
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.
There are no words that will take away the devastating slap of a market drop, the pain of a postponed bull sale or the exhausting frustration that things feel out of control. The page will eventually turn and the world will still need great beef and those who raise it.
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%.
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