“Monthly retail beef prices set successive new records in July and August,” according to USDA analysts in the most recent Livestock, Dairy and Poultry Outlook. “August retail Choice beef prices reached $5.39/lb. and All Fresh beef reached $4.97. Although beef prices are lending some support to pork and poultry prices, pork and poultry are in such abundant supply that they are likely to dampen continued upward movement in beef prices, especially with the seasonal decline in summer grilling demand. Despite the price-dampening pressure from competing meats, generally declining year-over-year beef supplies will result in retail beef prices that are likely to remain near current levels for some time.”
“Last year’s record-high production costs and drought-reduced supplies continue to force retail meat prices higher with beef, pork and chicken prices setting new records again in August,” say Len Steiner and Steve Meyer in their September 18 Daily Livestock Report. “This marks the fourth time this year that the average retail price of Choice beef has set a new record … August is the fifth month this year that the average price for All Fresh beef (which included grades other than Choice) has been record high.”
Wholesale beef values continue to languish, though, with Choice boxed beef cutout value ending the week at $192.39/cwt. and Select at $175.96.
“The beef cutouts continue to trudge through a less than desirable marketplace with further price declines. September has historically been a slow time for beef movement, and current prices were not unexpected,” says Andrew P. Griffith, University of Tennessee agricultural economist, in his weekly market comments.
“What might have been unexpected has been the continued sluggishness of prices. A recent Food Demand Survey (FooDS) conducted at Oklahoma State University found consumers’ willingness-to-pay for steak and hamburger increased by 8.30% and 4.21%, respectively, from August to September. This is positive news, and bodes well for the beef industry, but few folks will get excited unless boxed beef prices make a positive advancement," he says.
"The situation may get worse before it gets better as placements of heavyweight cattle in feedlots from April through June have started entering the harvest system. The increase in the quantity of beef on the market may provide resistance to the cutout price making positive moves in the short term. Packers will continue to rely heavily on the export market to support prices,” Griffith says.
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