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Rising trends in beef market - carcass premiums and cattle prices

The beef industry in 2023 has witnessed notable trends in carcass premium spreads, cattle prices, and market dynamics. As the year progresses, the carcass premium continues to show strength, reflecting the complex interplay of supply, demand, and pricing in the beef market. 

Live Cattle futures have recovered, with noticeable gains in December contracts and a slight dip in recent days. However, despite these uptrends, cash fed cattle prices have seen a decline, with a significant drop in negotiated steer average prices. 

The wholesale cutout values also experienced a marginal decrease, aligning with a general 4% price decline since November. This trend is further accentuated by a reduction in cash cattle prices by roughly 8%. 

Interestingly, packer spot market margins have moved positively, with analyst estimates indicating a range from $20 to $60 per cwt. This shift is crucial as it brings back the incentive for increased weekly slaughter, potentially impacting supply chain currentness. 

A surge in fed cattle slaughter was observed, marking a departure from the average in the preceding weeks. This increase, along with the holiday season approaching, is set to influence the forthcoming production weeks. 

The article also sheds light on individual meat cuts, noting variations in pricing for items like boneless CAB ribeye and tenderloins. The nuances of these price changes are indicative of broader market dynamics, including supply levels and consumer demand patterns. 

As the year-end approaches, a review of cutout value spreads reveals a 22% increase in year-to-date fed cattle prices and a 12% rise in comprehensive cutout value. The price spreads across different quality grades and the Certified Angus Beef (CAB) trend also offers insights into market movements and consumer preferences. 

Source : wisconsinagconnection

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