In the beef industry, wholesale boxed beef prices are used to gain insight into consumer demand. In recent days, Choice beef prices have climbed above $2.50/lb. - very strong demand indeed compared to year-ago prices. But with the Choice/Select spread currently backing off the $30/cwt where it was earlier this week, now hovering at approximately $27.53 as of Tuesday at midday, Extension Livestock Market Economist Dr. Glynn Tonsor tells Radio Oklahoma Ag Network Farm Director Ron Hays that this price swing may have peaked out for the year.
“That’s a very wide Choice/Select spread,” Tonsor remarked. “It’s very common that from roughly February, early March, we increase the Choice/Select spread until about this time of year. Usually sometime in June is when that spread peaks.”
And Tonsor says we are right on track for that to happen now. In fact, last year’s spread peaked this very same week. The important thing to look at though, says Tonsor, is that a high spread is an indication, or a demand signal, for quality. By breaking it down into primal cuts, he says you get a clearer picture of which specific cuts are actually driving the market - instead of looking at the carcass as a whole.
“What I want to call our attention to is trends versus last week, and more importantly, last year on those primals,” he said, pointing out that the total cutout is up 13%, while rib cutout is up 19% and conversely the loin, down 2% - all the other cutouts are up atleast 17%. “Loin sticks out like a sore thumb; a bit of a drag if you will, on that total carcass.
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