Beef prices show stability at high levels
Boxed beef prices have been fairly stable for the last few months, which University of Tennessee ag economist Andrew Griffith said is a positive sign for the beef cattle industry.
“Since the middle of April, the weekly comprehensive boxed beef cutout price has only traded outside of an $8 range for a four-week period in June and early July,” he said. “The cutout has spent most of its time trading on either side of $300, and there are no signs it will deviate in the near term.”
Griffith said being able to sell beef at these relatively high levels for so long is a sign of strength.
“This type of price action is positive for the beef industry in that packers have been able to consistently move beef products at these elevated price levels,” he said.
Looking at beef prices by cut also helps illustrate the current picture.
“The loin and rib primal were the price driver in June, with the brisket also demonstrating strength in late June and early July,” Griffith said. “Middle meat prices softened through July, which is the primary reason the cutout fell off its June highs. However, the brisket and short plate also contributed to some of the boxed beef cutout price decline.”
Other cuts have been providing support for beef prices as analysts look ahead to the Labor Day holiday.
“Alternatively, the chuck, round and flank primal prices have held their own the past month and continue to offer support for the comprehensive cutout,” Griffith said. “Middle meats may garner some interest heading towards Labor Day, but will likely soften again heading into late summer and the fall months.”
Cattle and beef markets have fundamental support, although he has concerns with ongoing economic conditions.
“The fundamentals of supply continue to support strong prices, but the concern of beef demand will hang over the market as long as inflation persists and as interest rates remain strong,” Griffith said. “As the cattle market heads deeper into summer, the seasonal trend for slaughter cows and bulls is price softening.”