Beef product demand throwing in a few surprises
Tuesday, November 5, 2019
Demand for different beef products typically follows distinct price patterns as the holiday seasons near, but there have been minor surprises as October turned into November.
“Boxed beef prices increased about 10 percent over the month of October into early November,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist. “This increase was significantly higher than the normal seasonal bump of less than 2 percent. U.S. Department of Agriculture data shows Choice boxed beef cutout is currently up nearly 7 percent year over year.”
As grilling season wanes after Labor Day, some steak items, such as strip loins, tend to decline. This typical pattern has continued into November, with wholesale strip loin prices dropping about 6 percent in the past month. However, strip loin prices are currently up more than 6 percent from one year ago.
“Tenderloin has a very different seasonal price pattern,” Peel said. “Colder weather into the end of the year typically supports restaurant steak demand resulting in higher tenderloin prices through the fourth quarter of the year.”
This fall, wholesale tenderloin prices increased faster and more dramatically than usual, jumping 38 percent in October. Overall loin primal prices increased more than 11 percent in the past month and are currently up 10 percent year over year.
Ribeye prices typically have a sharp and pronounced seasonal peak in November, typically caused by holiday demand for prime rib. This year the price increase started early with October wholesale ribeye prices up more than 18 percent in the past month.
“Wholesale Choice ribeye prices touched $10 per pound last week, the first time since mid-2017,” Peel said. “Rib primal prices have increased nearly 13 percent in the past month and are currently 4 percent higher year over year.”
Both chuck and round products tend to increase seasonally from August into September with the prospect of fall weather boosting demand for roasts and stews. End meat primal prices are generally flat through the September and October months. They typically finish the year even weaker, though typically only by a slight margin.
“October was a mixed bag for chuck products with shoulder clod prices higher despite lower top blade prices,” Peel said.
Several chuck products have become popular export items and USDA data indicates seasonal patterns for these cuts have been changing in recent years. Demand for the clod petite tender continues very strong, with prices up more than 25 percent in the past month. Wholesale chuck roll prices were higher seasonally, up 12 percent in the past month.
“Overall, chuck primal values were up more than 7 percent in the past month and are currently nearly 6 percent higher year over year,” Peel said. “Round products displayed similar variability. Top round and outside rounds moved higher in October. Bottom round and eye of round prices moved lower. Wholesale round primal values moved nearly 5 percent higher in October and are currently about 4 percent higher year over year.”
Peel added there is a supply component affecting wholesale beef markets as well, with lower Choice grading percentages since late May.
“The reduction in Choice beef supply relative to Select has resulted in a counter-seasonal high Choice-Select price spread since the summer,” he said. “Strong demand and tighter Choice beef supplies are contributing to sharply higher Choice beef product prices in the fourth quarter.”
The Oklahoma Cooperative Extension Service is one of two state agencies administered by OSU’s Division of Agricultural Sciences and Natural Resources, and is a key part of the university’s state and federally mandated teaching, research and Extension land-grant mission.