Beef Trends - August 16, 2019
All current beef pricing trends are based on USDA data as of Aug. 14, 2019. Last week’s trends refer to the USDA market for the full week of Aug. 5, 2019.
Cash cattle traded down last week, with trades occurring between $110/cwt to $114/cwt. Analysts expect much lower trading to occur this week. There have been bids at $107/cwt, and even some as low as $100/cwt.
Harvest came in at 642k head for the week of Aug. 5, 2019, which was higher than the prior week and right around analyst projections. Of that 642k head, 498k were of the steer/heifer variety. Harvest for the week of Aug. 12, 2019 is expected to be around 629k head.
77% of all steers/heifers graded Choice or Prime for the week ending Aug. 2, 2019, which was down from the week prior. Select grading was also down at 18.9%, but Ungraded was up, around 4.1%.
Media reports have indicated that on Aug. 9, 2019, Tyson Foods experienced a plant fire in their Finney County, Kansas, plant. It is reported that Tyson is still assessing the total damage, and the plant is closed for the time being. Analysts report that this is generating a lot of uncertainty in the beef markets. According to CattleFax, roughly 6% of the entire beef livestock in the United States runs through this plant, and this plant accounts for 23.5% of all Kansas harvest. Analysts report that early-week trading so far this week is indicating that beef prices are on the rise. On a positive note, media is reporting that there were no reported injuries due to the fire.
The ground chuck market traded flat last week. Data suggests that this market will peak at the end of August. Analysts report that the Tyson plant fire has worried the market regarding supply, with Labor Day around the corner. Consequently, prices are up sharply in current week trades.
GROUND BEEF 81/19:
81/19 ground beef took a small gain in price last week. Like ground chuck, this market typically peaks around Labor Day weekend. Once again, analysts are citing the Tyson Foods Kansas plant fire for the sharp rise in markets so far this week.
GROUND Beef 73/27:
The 73/27 ground beef market was slightly up last week. However, analysts this week are reporting much higher asking prices on all ground beef due to supply concerns.
Peeled knuckles traded up by a few cents on all grades last week. Current Choice-grade prices are much higher this week, but are lower than where analysts would expect them to be at this time of year and could be a value buy.
All inside rounds took discounting in price last week. Although the market has traded relatively flat to slightly up for a few weeks, analysts report that the market could start to soften through September before seasonal gains in October and spikes in early November, given historical data trends. Once again, analysts are stating that the Tyson Foods Kansas plant fire has put a price premium on all rounds this week.
BOTTOM ROUND FLATS:
Bottom round flats traded up slightly last week. Historically, analyst data suggests that this market will trade steady to slightly lower through mid-September before a seasonal peak in early October. However, it is reported that the USDA market this week is showing higher prices due to the Tyson Foods plant fire.
EYES OF ROUND:
All grades of eyes of round were slightly up to slightly down last week. Although this market is slightly above the three-year seasonal average, analysts report that this market will typically take a slow climb for the next few months before peaking in mid-to-late October. It is reported that this beef cut is also being impacted by the Tyson Foods plant fire, as analysts cite higher prices this week over supply availability.
Strip loins took large increases across all grades last week. Strips historically soften slightly throughout the remainder of the year, but analysts report that with the uncertainty in the beef market right now, historical seasonal data should be considered accordingly.
Choice top butts took a discount in price, and Select product took a sharp increase in price last week. Choice-graded top butts are trading this year well below what reported seasonal averages would suggest. Analysts site that this market typically reaches its low point in early October.
Tenders experienced a modest increase to price last week. Historically, the tenderloin market typically peaks in early December, but analysts report that with the uncertainty in the beef market right now, tenders could spike sooner than when analysts previously thought.
Analysts report that the ribeye complex saw strength across both light and heavy ribeyes in almost all grades. The only discounting was in Ungraded heavy ribeyes, down a few cents. Analysts are calling for both the light and heavy ribeye market to move upwards over the coming weeks.
Chuck rolls traded slightly up to flat last week. In two of the last three years, chuck rolls have started to climb in price in August, and continued to climb through early October. Analysts report that they are up a healthy amount in current week trades.
TERES MAJOR MUSCLE:
Teres Majors posted decreased prices across all products last week. Three-year data suggest that this market trades relatively flat through the remainder of the year.
Although historical reports indicate that briskets typically soften in the summer months before a small bump for Labor Day, the brisket market is trading higher now than at any point in the last three years for this time of year.
Select ball tips traded flat last week, but it is reported that Choice product took a large discount to price. Although data suggests ball tips having a slight bump around Labor Day weekend, analysts report that this sub-primal typically softens through the remainder of the year. However, prices are higher this week, as analysts evaluate the impact of the Tyson Foods Kansas plant fire.
Flap meat traded up at what analysts would consider a very healthy mark last week. Currently, flap meat is trading well above its three-year average, even though six weeks ago it was trading well below. Analysts suggest that flap meat will increase slightly until Labor Day, before weakening through mid-October.
Flank steaks traded slightly down for the Choice grade, but took what analysts would consider a moderate increase on Select product last week. Flank steaks typically soften through the remainder of the year until mid-December, but analysts are pointing to the Tyson Foods plant fire for the recent strength in the current week market.
The outside skirt market took what analysts would consider a moderate loss last week. Although day-to-day trading over the last few weeks has been very active, according to analysts, they are reporting that this market typically continues to weaken through mid-October before flattening out for the remainder of the year.
The data contained in the Farmer’s Report is provided for informational purposes only, is not tailored to your specific purchasing needs, and is not intended as a substitute for any other publicly-available market data or information. The Farmer’s Report is compiled from the last-received market data provided by the United States Department of Agriculture (USDA) and/or other market sources, and is subject to change without notice. Nothing herein is the opinion of US Foods®. US Foods neither assumes any legal liability nor makes any warranty or guaranty, either express or implied, regarding the completeness, accuracy or usefulness of this information.