Steak prices show strength of CAB brand vs. Choice
April 15, 2011
As cash cattle prices shot up to record highs in March and the futures markets showed incredible strength, consumers were asked to pay record prices for beef. Shaking off worries about the economy, they responded positively.
Ground beef and cuts from the chuck and round led the increase, but middle-meat steaks moved higher, too. Faced with record high prices for the most expensive cuts, more consumers opted to ensure the eating experience by turning to the Certified Angus Beef ® (CAB®) brand.
“As middle meat prices rose, the CAB/Choice spreads widened,” said industry analyst Julian Leopold, of Leopold Foods. He has written the monthly “CAB Market Watch” column for licensees since January 2010, making note of relative prices for USDA Choice and CAB cuts.
Comparing year to year, CAB rib eyes rose 3.2%, from $5.58 per pound (/lb.) in March 2010 to $5.76 this March, while the Choice rib eye managed only a 2-cent increase. That amounted to a 40% increase in the CAB/Choice ribeye spread to $.56/lb., Leopold noted
He saw a similar pattern in the price relationships for CAB vs. Choice short loins and tenderloins. “The 16.1% increase in CAB tender prices, at $8.95 vs. $7.71 in March 2010, beat the 15.2% increase in Choice tenders,” Leopold said. “More importantly, the 52-cent CAB/Choice spread for tenderloins was even wider at 33.3%.”
The Iowa-based consultant made news in 2009 with an analysis of the relative wholesale prices for 15 CAB vs. Choice beef cuts, showing demand for CAB outstripped that for Choice for a five-year period that included the recession.
What do the spring 2011 prices mean? “Even in this higher-price environment—with record high cutout prices, abundant grading and weekly increases in beef production—it looks like we’re seeing improved high-end beef demand,” Leopold said. “Can this continue with high-priced gasoline, several global economic uncertainties and widespread unrest in the Middle East? Only time will tell.”
You may also like
Apply by April 1 for Colvin Scholarship
The production agriculture, undergraduate and graduate scholarship categories each have tailored requirements. In 2025, the Colvin Scholarship Fund supported 27 students with awards ranging from $2,000 to $7,500.
Working in Balance
Cattlemen have a responsibility to look critically at their own herd, determine the areas that warrant improvement, and select animals accordingly. Stockmen bring immense value by objectively evaluating phenotypes, regardless of what the numbers say, and setting individual breeding objectives.
Healthier Soils and Stronger Herds
Effective land stewardship requires an understanding of how each decision affects forage growth, cattle performance and long-term stocking rates. When land is the foundation of the business, producers are more likely to invest time and resources into managing it intentionally.