Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   

Agricultural News


Is Increasing Demand Driving Improving Wholesale Beef Values?

Mon, 11 Jun 2012 11:14:55 CDT

Is Increasing Demand Driving Improving Wholesale Beef Values?
Rising wholesale beef prices could be due to several factors says Derrell Peel, Oklahoma State University extension livestock marketing specialist. He offers his latest analysis courtesy of this week's Cow-Calf Newsletter:

The Choice boxed beef cutout value was $197.16/cwt. last week, the second highest weekly average this year and only $1.35/cwt. below the early March peak. Choice values have made a strong rebound after dropping to a weekly low of $177.79/cwt. in mid-April. Currently, Choice boxed beef is 13 percent higher than the same time last year. The latest Select boxed beef weekly average was $185.01/cwt., up 10 percent from one year ago at this time.

The Choice-Select spread has widened sharply in recent weeks, which is the typical seasonal tendency at this time of year. The latest boxed beef values increase the Choice-Select spread to $12.15/cwt., about double the $6.03 spread this time last year. The spread is also above the five year average level of $10.13/cwt. (for this time of year), which represent the first time the spread has exceeded the five year average weekly level since the first week of January. Thus, the Choice-Select spread has gone from a seasonal low in late March of $0.30/cwt. (well below the average seasonal low) to current levels above the average level for this time of year.

What do the increase in both Choice and Select boxed beef values from year ago levels and the widening of the Choice-Select spread in recent weeks tell us about beef market conditions and, in particular, about beef demand? Total beef production is down 2.8 percent so far this year so higher prices would be expected with steady beef demand. Thus, higher boxed beef prices do not necessarily reflect increased beef demand, though they do suggest that demand is holding steady in the face of reduced supplies and higher prices. However, the increase in Choice relative to Select prices does suggest stronger demand for high quality beef. This is borne out in the changing values of various wholesale cuts. At the current time, Choice wholesale values for Ribeye and Tenderloins are up 27 and 24 percent year over year while Chucks and Rounds are up 13 and 6 percent compared to last year.   

The increase in wholesale beef prices from year ago levels could be due mostly to reduced beef production so far this year. However, the sharper increase in middle meat values relative to end meat values and the wider Choice-Select spread suggest that beef demand is improving. Wholesale values are expected to increase further with sharper year over year beef production decreases in the third quarter. Continued improvement in beef demand will determine how much higher wholesale beef prices may go.


   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Oklahoma Youth Expo Sale of Champions Sale Order Available Here- Sale Set for 4 PM Friday  Fri, 17 Mar 2023 04:50:54 CDT
  • Rural Voters Dominated Vote to Defeat Recreational Marijuana March 7th  Fri, 10 Mar 2023 07:13:05 CST
  • Ron Hays Talks to Israeli Ag Tour Guide Colin Lotzof About the Miraclel of Ag in Israel  Wed, 22 Feb 2023 22:11:04 CST
  • OALP Members Experience First Hand View of Cutting Edge Drip Irrigation Technology as Israel Travel Ends  Wed, 22 Feb 2023 10:51:49 CST
  • OALP Members Get First Hand View of Cutting Edge Drip Irrigation Technology as Israel Travel Ends  Wed, 22 Feb 2023 10:50:10 CST
  • Oklahoma Ag Leadership Program Sees Fruit, Beef and Dairy Production North of the Sea of Galilee in Israel  Mon, 20 Feb 2023 21:56:02 CST
  • Oklahoma Ag Leadership Program Sees Diverse Farm Operations in Jordan River Valley of Israel  Sun, 19 Feb 2023 21:17:30 CST
  • Israeli Tour Guide Mark Kedem Talks About The Cultural Aspects of What Class XX of OALP is Experiencing   Sat, 18 Feb 2023 22:17:23 CST

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Beef council Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Oklahoma City Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.
       
       
       
       
       

    Search OklahomaFarmReport.com

    © 2008-2024 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.