Report Shows Third Consecutive Week of Big Boxed Beef Trade VolumeWed, 03 Sep 2014 10:12:14 CDT
On a regular basis, Ed Czerwein of the USDA Market News Office in Amarillo, Texas offers a review of the previous week's boxed beef trade. Here is the weekly boxed beef trade for week ending August 30th: The daily spot choice boxed beef cutout ended the week last Friday at $246.30 which was $3.47 lower than the previous week. There were 981 loads sold for the week in the daily box beef cutout, which was another very big week as retailers bought product for Labor day along with restocking shelves after the weekend. This was the biggest week in volume since the week before Thanksgiving last year.
As we have mentioned in the previous weeks there had been very few outfront sales earlier that were aimed at this Labor Day weekend so buyers had to purchase product pretty much as they needed it. We had big outfront sales in the last couple of weeks but they normally don’t actually get delivered for 22-90 days or longer which should start helping soon.
Another big test concerning the success of Labor Day will be measured this week, since the first few days after a big grilling holiday the orders usually roll in to restock the shelves.
The comprehensive or weekly average choice cutout which includes all types of sales was $247.26 which was $4.65 lower, and followed the daily cutout downward. However the big news for the week was that the total volume was very big again.
The total reported Box Beef volume of 7,752 loads was 35 loads more than the previous week. That makes three weeks in a row of large load counts which included a lot of the business for outfront sales. The four week rolling or moving average for the box beef load count shows a very dramatic improvement in total sales as we dropped the prices. We have actually surpassed last year at a time when sales are usually in a more sideways pattern. Last year we saw the enormous spike in June and July when prices dropped and this year we moved that spike later in the summer when prices dropped. Out front sales during the past three weeks have added considerable volume to this spike.
The second big item for the the week was the Outfront sales which were 1,794 loads and was 105 loads more than the previous week. These out-front sales which had been very low for several months really skyrocketed on the heels of declining prices to heights that we have not seen in some time. Long term contracts made up a big portion of the outfront sales again this week. They normally don’t start delivering for at least 90 days and probably won’t impact until after Thanksgiving.
In the outfront sales for this week included over 2 million pounds lbs of brisket which were roughly 5 cents over the current trade. Round products showed about 3.5 million lbs and their average prices were steady to 6 lower compared to the negotiated trade and even much lower when compared to the formula trade. There was about 1.5 million lbs of tenderloins that saw average prices steady to as much as 20 cents lower than current prices. Also the previous two weeks have shown almost 2 million more lbs of tenderloins that were booked ahead. During the last three weeks these outfront sales totaled a whopping 4,700 loads and will be delivered 22 days or later after their sale was made. However as you saw from the average prices they are actually weaker than the current prices in many cases.
Exports dropped and were at 800 loads which was 131 loads lower. The formula sales were lower also and were at 3,271 loads which was about 42 percent of the total loads sold and 185 loads less than last week.
Another really interesting thing this week was that the latest avg National steer carcass weight for week ending August 16th was 4 lbs higher at 879 lbs which is not far from the previous all time record of 880 lbs set in the fall of 2012. This is quite early in the year to meet or exceed records so it looks like we might be headed for much higher weights this fall. That weekly carcass weight compared to 864 lbs last year, which makes it 15 lbs higher than last year. 15 lbs does not sound like much until you put it into perspective, since adding 15 lbs on every finished cattle carcass currently harvested is roughly the same as adding 9,000 extra 800 lb carcasses each week. We are definitely short of numbers but will make up for part of it with increased weights.
Click on the LISTEN BAR below to listen to Ed's comments about the weekly boxed beef trade.
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