CAB Insider Market Report Shows More Livestock Price Action and Holiday Beef Demand

Last week’s cattle harvest was reduced because of the Thanksgiving holiday, producing only 528,000 head, following the previous week’s inflated total of 631,000 head.

The value of fed cattle saw a strong recovery last week to just under $190/cwt, an improvement of $3/cwt from the previous week. Prices have remained range-bound since late September, trading between $184 and $190/cwt. for the period.

Calf and feeder cattle prices have been much more active over the past three weeks with two market-moving events. Widespread rainfall in the central part of the country initially sent small grain breeders to the auction markets with enthusiasm, while winter wheat and similar winter grazing prospects showed greater optimism. Additionally, the discovery of dung worms in a cow in southern Mexico prompted authorities to close the U.S.-Mexico border indefinitely. Feeder cattle futures, still volatile, on the CME reacted strongly upward in the wake of both events. Next January’s contract settled in a range around $258/cwt. over the last five days after a rapid rise from $243/cwt. opening class on November 15.

Demand for average meat during the holidays remains a key feature of the beef market as carcass quality exceeds what appears to be the low annual percentage of premium carcasses. USDA Prime stock has fallen from its multi-month position at 10% of the total to 11% more recently. The share of carcasses eligible for the mark and certified for CAB has quickly adjusted, going from its annual low of 32% in early November to 36% most recently.

Increased demand during the holidays
The canned beef market is nearing the end of the latest price surge for high-demand medium meats. The window is closing quickly for bulk orders that will ship in time for consumers to shop before the Christmas holidays. Tracking week-to-week price activity shows that last week’s sharp rise in cutoff values ​​gave the December market a somewhat longer shelf life than was the case in recent years. It’s likely that the end of November date for the Thanksgiving holiday moved purchasing activity forward a few days this year.

True to expectations, CAB bone-in and boneless rib-eyes experience the largest upward price swings as we evaluate the CAB carcass cut by cut. CAB ribeye rolls increased $1.31/lb. last week averaged $13.48/lb. This is the second record after the all-time high of $14.49/lb. wholesale price reached in 2021.

Fillets are also up sharply with the brand’s latest wholesale average at $17.62/lb, up from $1.12/lb. hike from the previous week and $5.42/lb. above the summer minimum. Strip steaks have been a focus for the brand in recent years as a more affordable roasting product with much the same holiday appeal. At an average wholesale price of $8.20/lb. strip steaks are currently a few cents less than last year’s price.

The CAB cutout overview shows a relatively flat price pattern ranging from $300 to $320/cwt. since mid-July. The summer cutout price peak was lower than in 2021 and 2023, but fall demand pushed the total value of CAB carcasses slightly above that of years beginning in October.

Beef demand has been exceptional in a period where carcass tonnage has increased year-on-year from the second quarter of 2024. Over the past five years, prices for carcass cuts have averaged 2 3% below their fourth-quarter highs as holiday demand winds down. end of the year.