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Agricultural News


Boxed Beef Continues to Drop in Latest Week But Still Historically High

Sat, 24 Jul 2021 22:02:13 CDT

Boxed Beef Continues to Drop in Latest Week But Still Historically High The daily spot Choice box beef cutout ended the week on Friday, July 16 at $267.94, which was $10.65 lower compared to previous Friday and now about $70 lower over the last five weeks. However, it is still much higher than all previous years to date. Last year, it was $200.47 on the same Friday, which was about $4 lower at the time. During 2015, it was $233.30 on the same Friday, so still about $34 dollars higher yet. The end of this week, the daily Choice Chuck and Round primal were $8 to $9 lower. While they have both been creeping lower, it is still much higher than all previous years. The daily Choice Rib was $10 higher and the Loin primal was $35 lower, but the Rib had already dropped about $170 over the past four weeks. The weekly total for the daily cutout was big with 722 loads and about 10 percent of the total weekly loads sold.


The weekly average Choice cutout, which includes all types of sales including the daily Choice cutout, was $269.13, which was $10.80 lower but still a little higher than the daily cutout.


The total sales were 6,991 total loads for the week, which was 961 loads higher than the previous week and the biggest number in many weeks. The four-week moving average graph shows that the big grilling season price rally pushed the sales volume lower since April, which has not been good. When that happens, there is typically a big price drop for a while, which has been and is now occurring. The out-front sales which get delivered after 21 days were 1,611 loads, which was 548 loads higher than last week but included over 400 loads of forward contracts that can be delivered during a big portion of the year.


Formula sales were at 3,305 loads, which was 81 loads higher than last week and about 47 percent of the total loads sold this week.


The exports as reported on the Box Beef report were 728 loads, which was 8 loads lower compared to the previous week. This week, 90 loads were sold to our NAFTA neighbors and 638 loads were going overseas.

The first quarter export volume is now the highest ever seen. This yearís second quarter is the highest second quarter in the last 8 years, but itís only slightly higher than 2018 and 2019 mostly due to lower NAFTA exports.

These massive exports have helped the prices but the total first quarter box beef sales volume did not increase. That fact indicates that domestic U.S. sales were likely lower than last year. The sales volume in the second quarter of 2021 is lower than many years, but higher than last year which was extremely low due to packing plant shutdowns. The domestic U.S. sales volume looks like it continues to be lower than whatís needed for the FIS cattle harvest. The estimated weekly total FIS cattle harvest for week ending July 17 was reported at 653,000 head compared to 646,000 head the same week last year. The year-to-date total is now about 800,000 head higher than last year. Major primal cuts impact the cutout value and the weekly average numbers include all different types of sales. The weekly average Choice Chuck and Round primal were $4 to $6 lower, but still higher than all previous years now which has stopped the cutout from dropping lower at a faster rate.   


The weekly average Choice Rib was $8 lower and the Loin primal was $32 lower so they both continue to drop following the declines in the daily prices. They are both approaching the normal summer lows now after they both topped out higher than all other years - undoubtedly helped by restaurants and the grilling rally. The Rib and Loin products are always the driving force in the grilling rally. Also, this is the time of the year when hot weather increases hamburger grilling; steaks continue to be grilled some, but not as much as earlier during grilling holidays.


The daily cow cutout ended the week on Friday, July 16, $2.20 higher at $232.44 and the 90 percent trimmings were at $283.54 which was $1.66 higher compared to the previous Friday. The 90 percent trimming prices have an impact on the Chuck and Round prices from finished cattle carcasses because both of those primals provide cuts that go into ground beef. So, high 90 percent trimming prices pulls other ground beef type items into higher prices. That fact happened during 2014 when 90 percent trimming prices were near $300.00 per cwt much of the time which helped the Choice cutout get higher with a massive jump for the Chuck and Round. Also, this year continues to have more restaurants reopening so larger hamburger sales continue to help the 90 percent trimming prices, along with Chuck and Round prices from finished cattle.


Source- Ed Czerwien



   


 

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