Back to the market, boxed beef values have skyrocketed beginning mid-March with USDA (0-21 day delivery) and Urner Barry (0-10 day delivery) showing the daily spot market Choice cutout value advancing 25% or 15%, respectively. By comparison, the USDA Choice cutout spiked 12% following the Holcomb plant fire last August.
Last week’s CAB cutout price is listed with an asterisk in today’s table to highlight the fact that this is reported on Thursday whereas Choice and Select are reported through Friday. The abrupt daily price movement last week was such that a one-day difference in reporting creates a discrepancy in the averages that needs to be noted. As such, the CAB cutout value should read a few cents higher on the week.
The other side of this predictable response in boxed beef values is the lack of a similar spike in fed cattle prices. CME Live Cattle futures contracts have been closely aligned with equity markets, following the downward trajectory seen in equity index values since late February. As boxed beef prices moved sideways during the first week of March, followed by the recent spike, the April LC contract moved down from a $120/cwt. price point on February 20th to the contract low $92/cwt.
Plenty of commentary can be written in the margins but cash fed cattle prices have shouldered more than their share of negativity through the futures, reflecting a different picture than the daily beef supply and demand dynamics.
A small light of hope was seen late last week as more than one packer chose to increase the week’s negotiated prices established earlier in the week. By Tuesday this week the market is reflecting the same with $115/cwt. live bids on small volume. Live Cattle contracts were up the limit Monday and Tuesday but mostly negative Wednesday with the only positive being the April contract, up just over $3/cwt. by midday.