With cattle prices up 25% from a year ago, traders worry that higher beef prices will run into consumer resistance.
Faced with a reduced slaughter and prospects for fewer cattle coming off the trucks, wholesale prices for beef cuts have reached record levels, portending higher prices for choice beef cuts and hamburger going forward into the spring and summer grilling season.
USDA reports the wholesale price for Choice beef cuts at $198.56/cwt. and $193.99/cwt. for Select cuts. Prices for ground beef rose to as high as $209.10/cwt.
“For those keeping score, the daily USDA Choice cutout reached its highest level since last November. Less recognized but just as significant, the Select cutout has been in record territory all week. The delayed marketing of cattle due to poor feeding margins has resulted in heavier carcasses with a higher grading percentage that has further reduced the quantity of Select product in the pipeline. Forward business remains light, with the combination of high deferred cattle futures and increasing doubts regarding consumer demand making it extremely difficult for traders to reach consensus on forward pricing.” according to USDA’s Agricultural Marketing Service.
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