Smaller, better harvest
Here’s this week’s Meat Market Minute:
Live cattle traded down last week amidst lower futures and reduced harvest numbers, marking the second consecutive week that live values dropped in unison with curbed federally inspected harvest. Production, at 589,000 head, marked the first time harvest has been below 600,000 on a non-holiday week since 2009.
Packers continue to pull hours for production in order to push margins towards the black. In doing so, they were able to slightly increase asking prices for all grades. Demand for CAB middle meats remained strong–ribs were under the most pressure as retailers increase their spot purchases for Superbowl featuring.
CAB acceptance rate returned to the path of improvement coming into 2012, rebounding from 19.1% the last week of the year to 21.8% in mid-January. The positive move comes as the entire herd improved grade and brought USDA Choice levels above 60%. That share had fallen significantly since September, for 14 consecutive weeks. The mid-January showing of 63% Choice in the mix and 3.6% Prime comes despite steers dominating the fed harvest, accounting for more than 64% for three weeks running.
Until we meat again,
-David
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