Futures are still leading the cash market a bit as the short-lived October contract closed this Tuesday at $125.02/cwt, while packer bids early this week were locked in the same
range seen a week ago between $122 and $124/cwt. Looking much further ahead, deferred futures are adding value to calves sold straight off the cow in the current spot market. Turning to the boxed beef trade, cutout values continue to fall rapidly in a fall pattern that’s grossly overdue. Much remains in flux in the 2021 market, with record-high seasonal beef
values inflated alongside so many other commodities and hard goods. Mid-October pricing should be moving upward at this time, but last week’s average Choice cutout was $11.52/cwt cheaper than the week prior. As of Thursday, the Certified Angus Beef ® (CAB®) brand cutout price was slightly more resilient, down $10.22/cwt. We suspect, that as of Friday, the decline would have been in line with the Choice decline. The Select cutout lost the least, down $7.47/cwt. This is logical in that when beef buyers begin to push back on price, the demand frenzy for quality sees some slack as well. Even so, the quality price spreads have been historically wide this year. Unsurprisingly, the rib primal has seen the most weakening price in recent reports. Last week’s negative $30/cwt rib slide for the CAB cutout was overdue based on the now longstanding imbalance in ribeyes versus the remainder of the carcass. This fourth quarter begins with unseasonal market signals regarding wholesale prices. Consumers are seeing inflation across so many products, especially staples such as food and gasoline. Anecdotally, grocery stores are wary of sticker shock to the consumer at the same time that labor shortages are commonplace in every sector, driving wages higher as stores try to secure new employees. Much remains in
question regarding retail beef demand this season.
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