As cattle backlog, quality improves
The slowdown in fed cattle going to town means beef quality is better.
Nevil Speer, BEEF Magazine
May 14, 2020
Since late March, Industry At A Glance has focused on COVID-19 and its influence on the beef industry. Those discussions have covered an array of topics including feeder cattle shipments, importance of risk management, ethanol, and shifting value components within the cutout. Last week’s column highlighted the sharp slowdown in fed steer and heifer slaughter during April.
The column noted that, “Final numbers still aren’t tallied (actual slaughter numbers run on a two-week delayed reporting cycle from USDA), but the industry will obviously be in a sharp deficit. Clearly, that has huge implications even after we get up back and running full speed.” Meanwhile, the discussion also targeted some coverage around the slowdown’s impact on beef quality.
The slowdown in fed cattle going to town means the slaughter mix looks different. As slaughter capacity has been squeezed, the best cattle get marketing priority and commodity cattle generally get left behind. This week’s illustration depicts that reality. Three things are important:
· The week ending May 2 (hence the last full week of April) saw an all-time record for cattle grading Prime at 11.29%.
· That trend has largely been in play all month; April ’20 also established a new monthly record with 10.39% of cattle qualifying for the highest quality grade.
· The difference between April and the first quarter of the year is record large – the jump was +0.63%; generally it goes the other way – grading percentages seasonally decline going into the second quarter.
With that, there are several key implications...
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