CME: Wholesale Lean Beef Prices Hold Stable This Summer


CME Group

via The Cattle Site - 06 August 2019


US - Wholesale lean beef prices have held stable this summer, reports Steiner Consulting Group, DLR Division, Inc.


Fresh 90 percent lean beef has run above $2.20/pound at the wholesale level for the last 14 weeks. This product is typically ground, used in hamburgers and other ground applications.


Lean items of 100 percent lean have done a lot of volume this year, and although those prices have been lower most of the year compared to 2018, they are some of the few higher value cuts that make up the boxed cow beef cutout value.


Boxed Cow Beef cutout values have followed a similar pattern to Fresh 90 percent lean beef, increasing since the first of the year, and in the last two weeks surpassed year ago prices (see graphic below).


This run-up in boxed cow beef is not evident in the slaughter cow prices which have been under $0.50/pound almost all year. The sluggish behavior around slaughter cull cow prices has been mostly attributed to high volumes of slaughter cows coming to market over the first seven months of the year.


Total cow slaughter is up 3.3 percent in the actual weekly data. Weights have likely been a factor in supporting both lean meat complexes. Cull cow weights have averaged 8 pounds lighter through the latest data (7/20/2019), offsetting effect to the high volumes of cull cows.


Cutter/Canner cows are representative of the 90 percent lean and 100 percent lean items. Thinner cows will typically produce fewer cuts, with less fat and trimmings. This is supported by lower average cull cow weights, and the high volumes of 100 percent lean meat items relative to last year.


Heavier cows in that same category are likely to have more cuts and more fat trimmings. Pounds of Cutter/Canner cuts moving through wholesale markets have been down about half a percent, excluding 100 percent lean items.


Items categorized as 100 percent lean have seen volumes sky-rocket in the early part of summer...


more, including charts [3], table [1]