PACKERS often look for a post-Thanksgiving holiday lift in boxed beef prices, as retailers put more focus back on beef. But it seems the lift came during the holiday week and not last week. The comprehensive cutout the week before last averaged $188.26 per cwt, up $1.86 from the prior week. But spot market prices were flat the first four days last week and volume was well below the four days of the holiday week.
Packers came into the week after killing 15,000 more fed steers and heifers in the holiday-shortened week than last year. This pushed the kill to an estimated 583,000 head, versus 561,281 last year. Meanwhile, the total load count volume in the comprehensive report was down 10% on the holiday week last year. So packers came into last week with far more beef around them than they would have liked. They appeared to admit as such by cutting kills Monday, Tuesday and Wednesday. They struggled to sell much on the spot market all week. Monday’s 88 loads of cuts was the smallest Monday total under mandatory price reporting and the fifth smallest load count for any day this year. The four smaller counts have all been Fridays.
Meanwhile, the Choice-Select spread remains historically wide. It was at $21.13 per cwt Thursday after widening to $22.16 per cwt on Nov 23. This was not far below the widest-ever daily spread of $23.54 on June 9, 2006. The Choice cutout is being held up primarily by the price of ribs and tenderloins. But buying for the Christmas-New Year holiday season is pretty much over, say analysts. So these prices look set to soften appreciably in the next week or so. Yet there’s little forward pricing, as packers are asking people to buy on formula.
Little cash live cattle trade had occurred when CBW went to press. Just under 8000 head sold in Nebraska and Iowa-southern Minnesota Wednesday and Thursday morning at $202 per cwt dressed, up $2 from the prior week (which saw a $4 increase). Packers were expected to have to pay at least steady money ($127-128)on the Southern Plains. But the futures closed lower Friday and trade in Kansas was at just under $125.
Pa Center for Beef Excellence Inc. with information from the CME Report, Cattle Buyers Weekly and other resources. For more information call 717-705-1689.