Cutouts jump higher

By David P. Anderson, Texas A&M AgriLife Extension Service professor and economist

July 8, 2023

cutout

Not to be outdone by record fed cattle prices, cutout values have jumped higher.  While the cutout out is dramatically higher, it is not at record highs.  The Choice cutout hit $337.43 per cwt on June 12th, up $23 over the last week and up $30.99 since June 1st.  It is the highest value since August 2021 and just slightly below the $337.56 on June 11th 2021.

The increase in cutout value included all primal cuts.  The rib, loin, and brisket all increased by more than $45 per cwt over the last week.  In percentage terms the brisket increased by 20 percent, the largest gains of any cut.  The Select cutout increased also, but not as much as the Choice cutout, so the Choice-Select spread increased from $20.12 to $27.19 since the first of June.

The cow boxed beef cutout is also increasing.  It has climbed steadily from about $194 per cwt in January to $227 per cwt in early June.  Beef cow slaughter is running below last year but, dairy cow slaughter is ahead of last year and will likely increase as milk prices struggle.

The rapid wholesale cutout value increases over the last two weeks since the Memorial Day long weekend suggests that there continues to be positive beef demand kicking off the summer grilling season.  USDA’s AMS national weekly retail beef report for this week indicates 64.1 percent of surveyed stores had at least one beef item advertised.  Last week 71.7 percent of stores had at least one item featured.

Beef production will continue to be lower than a year ago, supporting higher wholesale beef prices.  But normally, beef production increases seasonally in the summer months.  Even though production may increase from current levels, it will be below last year.  Reduced beef production combined with positive beef demand has drawn down beef in cold storage dramatically since the first of the year.  Since January, cold storage beef stocks have declined 86 million pounds, or 16 percent.

It will be pretty unlikely that the cutout will get to its all-time Covid induced record any time soon.  But tighter beef supplies and higher fed cattle prices should continue to support wholesale beef prices.

Southern Livestock

More News

Weighing the Market

Weighing the market

Heavier carcasses weigh on prices Cash calf and feeder cattle prices returned to near-record levels in May as ...
Cover Story

Registration opens for 70th annual Texas A&M Beef Cattle Short Course

The 70th annual Texas A&M Beef Cattle Short Course on Aug. 5-7 in Bryan-College Station is open for registration. The ...
Crop and Weather

Rangeland conditions vary across state based on moisture, precipitation outlook

Rangeland conditions across the state vary as producers contend with an abundance of precipitation in the east and ...
Cover Story

Texas A&M AgriLife Research and Extension Center in Corpus Christi celebrates 50 years serving Coastal Bend

From cotton boll weevil eradication to aquaculture genomics to advancing digital agriculture and artificial intelligence, the Texas A&M AgriLife ...
Columnists

Texas Side of Things

Although the calendar claims that the first day of summer is officially June 20th, I personally feel like ...
DC News

Two Farm Bill proposals boost reference prices

LITTLE ROCK — Despite their differences, the Farm Bill proposals led by U.S. Rep. Glenn "GT" Thompson and ...