Oklahoma State University's Derrell Peel says upcoming holiday may be instigator of recent beef rally.
Several factors have been limiting beef demand lately – cold weather, big supplies of competing meats, high gas prices, higher payroll taxes – but that is changing.
Choice boxed beef reached record levels above $200/cwt. last week, with fed cattle prices not far behind. The late spring rally comes after boxed beef and fed markets appeared to have topped in March, according to Derrell Peel, Oklahoma State University Extension livestock marketing specialist.
Peel says the rally can be attributed to beef purchases ahead of the upcoming Memorial Day weekend.
"Though the weather has moderated somewhat recently, winter conditions still occurred as late as last week," Peel says. "Purchases now seem to be more in the tone of insisting that the weather will warm up for the first big summer holiday, in the absence of concrete improvement in the weather so far."
Beef demand also is getting a boost in the form of lower gasoline prices and strength in competing meat prices. Broiler breast meat has made a strong increase, leading to the highest prices since 2010. On the pork side, ham prices have recovered dramatically since Easter lows, although pork loin prices remain relatively weak.
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