Center of The Plate: Beef

General Information:

Cash: Trade in the South occurred at mostly $108, $1 lower w/w. Moderate trade in the North was $107 to $108 live and mainly $169 dressed, also steady $1 lower. Feeder Cattle exchanged hands at levels mostly steady to $3 lower. Calves mixed, from $2 higher to $3 softer. Market cows also traded mixed.

Boxed Beef: Prices for the Choice boxed beef cutout averages $2.1174/cwt, down $4.29 for the week, while Selects settled at $197.94/cwt., a decrease of $6.73. Large slaughter rates combined with elevated carcass weights in recent weeks are resulting in ample supplies, at a time when fall demand is not fully in high gear. The result was a disappointing week for beef prices. Looking ahead, packers already had a calculated reduction in slaughter to accomplish two objectives: (1) to manage the box prices, by not overwhelming the market with beef, in a quiet time before demand improves before the holidays and (2) they don’t contribute to more leverage from the fed cattle suppliers by continuing to process large numbers of cattle. The more they process, the more leverage they give to their suppliers. The Choice/Select spread is widening, as quality grading slips, to $12. This should support boxed beef prices along with holiday demand in the coming weeks.

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