Derrell Peel Says Holiday Beef Demand Kicks In
Source: Cow Calf Corner, OCES
via Oklahoma Farm Report - 04 Nov 2019
Derrell Peel Says Holiday Beef Demand Kicks In Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel talks about wholesale beef prices trending higher- apparently because of holiday buying.
Boxed beef prices increased about ten percent over the month of October into early November. This increase was significantly higher than the normal seasonal bump of less than two percent from October to November. Choice boxed beef cutout is currently up nearly seven percent year over year. In total, beef demand is made up of many different beef products which have very distinct seasonal price patterns.
As grilling season wanes after Labor Day, some steak items, such as strip loins, tend to decline and this has continued into November with wholesale strip loin prices dropping about six percent in the past month. However, strip loin prices are currently up over six percent from one year ago. Another part of the loin, the tenderloin, has a very different seasonal price pattern. Colder weather into the end of the year typically supports restaurant steak demand resulting in higher tenderloin prices through the fourth quarter of the year. This fall, wholesale tenderloin prices increased faster and more dramatically than usual, jumping by 38 percent in October. Overall loin primal prices increased over 11 percent in the past month and are currently up 10 percent year over year.
Ribeye prices typically have a sharp and pronounced seasonal peak in November based on holiday demand for Prime Rib. This year the price increase started early with October wholesale ribeye prices up over 18 percent in the past month. Wholesale Choice ribeye prices touched $10/lb. last week, the first time since mid-2017. Rib primal prices have increased nearly 13 percent in the past month and are currently 4 percent higher year over year.
Both chuck and round products tend to increase seasonally from August into September with the prospect of fall weather boosting demand for roasts and stews. End meat primal prices are generally flat through September and October and slightly weaker to finish the year. October was a mixed bag for chuck products with shoulder clod prices higher despite lower top blade (source of Flat Iron steaks) prices. Several chuck products have become very popular export items and seasonal patterns for these cuts have been changing in recent years. Demand for the clod (Petite) tender continues very strong with prices up over 25 percent in the past month. Wholesale chuck roll prices were higher seasonally; up 12 percent in the past month. Overall chuck primal values were up over seven percent in the past month and are currently nearly six percent higher year over year...