Boxed Beef Sales Volume Jump, AgainMon, 15 Dec 2014 16:32:15 CST
Boxed beef sales are increasing rapidly as prices drop. In the weekly boxed beef report for the week ending December 13, the daily spot Choice box beef cutout ended the week last Friday at $245.03 which was a $7.51 lower. There were 847 loads sold for the week in the daily box beef cutout which was about 12 percent of the total volume.
The comprehensive or weekly average Choice cutout which includes all types of sales was $251.18 which was only $3.27 lower due partially to the buffering effect of formula prices. Many of the formulas are priced off of previous week's prices so they have a tendency to slow down the rapid decreases or increases that occurred in the daily trade. The total reported Box Beef volume jumped again as the price declined. There were 6,956 loads sold which was 474 loads higher for the week and actually jumped over 1,000 loads compared to two weeks ago.
The formula sales were steady at 3,404 loads which was only 63 loads lower than last week and 49 percent of the total loads sold. These formula sales run close to half of the sales volume each week and have a tremendous impact on the average prices for the week.
Ed Czerwein of the USDA Market News Office in Amarillo, Texas offers a review of the previous week's boxed beef trade. Click on the LISTEN BAR below to listen to Ed's comments about the weekly boxed beef trade.
Exports as reported on the weekly box beef report are predominately muscle cuts and they were at 836 loads which was 45 loads better than the previous week. Of that 173 loads were sold to our North American Free Trade Agreement neighbors and 663 loads were shipped overseas.
The chuck, loin and round primal cut prices were about 4 lower. The rib prices started it's seasonal descent after buyers completed their holiday shopping spree but it only dropped about $3 dollars after climbing $63 dollars since the first week of October. However the rib price normally drops quite a bit more severely later in the month, since in the past years it usually gave up most of what it gained prior to the holidays. The tremendously rising rib prices carried the cutout during the last six weeks because the other cuts had been mostly steady to weak and the impact of its falling prices will no doubt have a direct impact on the Choice Cutout unless the other primals rally.
The most recent out-front sales jumped 608 loads compared to the previous week to a total of 1,387 loads for the week. Out-front sales normal jump in December as buyers book product for ad specials after the holidays. The biggest chunk of out front sales were round products that were priced either side of steady compared to current formula sales. Some were sold a few dollars less and some a few dollars more. However the second biggest items were the middle meats and they were a much different story. They were sold out front at quite a bit less, an example would be the current formula price on 109 ribeyes averaged 797 and the outfront sales averaged 589.
The Cow Cutout was about $3.30 lower and ninety percent were about $5.50 lower. The cow cutout was actually at $233.53 on Friday and the Select cutout was $234.10 so they continue to be very close. The fall run for cows continues to be smaller than normal due to the several previous years of drought conditions. The big thing to watch will be the dairy cow slaughter if milk prices continue to fall.
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