… as 1st quarter Prime carcass supplies ran to a record high with nearly four times the share of the total fed cattle volume seen a decade ago, capturing 11% of production...
CAB Insider: Largest Q1 Prime Carcass Production Rewarded
By Paul Dykstra, Drovers
March 31, 2021
Federally inspected weekly slaughter has fallen in the past three weeks 20,000 to 25,000 head below late February and early March levels. Cooler cleaning and plant maintenance is the primary factor for the smaller head counts. Setting aside the March 2020 inflated slaughter pace, the current weekly slaughter numbers for the month of March are much higher than in 2018 and 2019.
Live Cattle futures were locked in a firmly positive mode six of the past seven days, with the April 2021 contract up $2.40/cwt. Considering that cash fed cattle prices held steady at $114/cwt for a seven-week stint, the futures action is considered very positive to the market. April will begin with the up front Live Cattle contract premium to cash. Early this week the futures gains stalled after a reasonable number of consecutive days to the upside.
Wholesale boxed beef prices are providing support to the fed cattle bias toward higher prices. The CAB cutout price jumped $6/cwt. while Choice was up $7.73/cwt. with Select up $7.74/cwt.
The narrowing of the carcass quality spreads last week was seasonally expected, but the direction from now through May or even June is anticipated to see the spreads widen. Quality grades should seasonally decline into this period while spring grilling demand builds with warmer weather.
As we move lower from record quality grade levels in the first quarter, it will be interesting and indicative of the resilience of demand for the period.
LARGEST Q1 PRIME CARCASS PRODUCTION REWARDED
Since 2015, weekly industry Prime grading percentages have steadily climbed, breaking from the traditional and trustworthy 2-3% of total production volume seen for years on end.
Fast forward to 2021, as 1st quarter Prime carcass supplies ran to a record high with nearly four times the share of the total fed cattle volume seen a decade ago, capturing 11% of production...
MIDDLE MEATS BACK IN THE DRIVER'S SEAT ...
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