That’s 18,000 fewer than the week prior. The lighter volume was a departure in what has been a fairly robust summer season of weekly head count totals, but this week’s projection is 660,000. The carcass sales side of the market saw a fairly stable environment last week, with USDA and Urner Barry reporting prices either side of unchanged. The sideways trending price structure for carcass cutout values is as stable and unmoving as we’ve certified angus beef ribeye in quite some time.
While minimal, we have observed a positive trend since spring. Competition for more richly-marbled middle meats has been a driver during the summer market and we anticipate that to continue as long as the grade underperforms through the fourth quarter. Since the start of 2022, the national Choice grade percentage posted record-large numbers through the first week of June. Easily the highest volume quality grade category, Choice increased specifically due to slippage in the proportion of Prime carcasses. However, it’s not due to more carcasses receiving the Prime stamp. Quite the opposite – quality grades are dropping resulting in more Select grade carcasses.
This is larger than summer values in the past two years. This supply data goes against what beef customers increasingly desire and are willing to pay for premium middle meats. To offset this drop, end users have started to suspend higher-quality beef with deep chill storage process known as “suspended fresh”. This ability to hold beef for months near its freezing point, but still in a fresh state, has elevated buying and storage of premium middle meats before prices soar from fourth quarter demand.
Prime to Choice cutout value spread. It seems we’ve discussed carcass weights too often in the past 36 months but it tends to be one of the most telling data points in the beef business. The latest data pegs the weighted average steer and heifer carcass weight at 862 lb. The lighter trend isn’t surprising for two reasons. First, backlog-induced record high carcass weights were noted in 2020 with the mid-July 873 lb. 2019 weight for the same period by 33 lb.