Last week, the Choice boxed beef cutout was $206.94 per hundredweight (cwt), up $1.23 per cwt from the February low, but 8% below the same time last year. Wholesale cutout values are increasingly lower in recent weeks compared to year-ago levels.
Current wholesale values are lower year over year for all beef primals. Rib primal values have moved seasonally higher since February but are currently 10.4% below values at this time last year. Loin primal values likewise have increased seasonally but were 10.8% lower year over year last week. Brisket values are down the most, currently 13.8% lower than the same point last year. Chuck primal values are down 7% year over year. Round primal values have been the strongest and were above year-earlier levels until last week, dropping to 1.3% lower than the same time last year.
The Select boxed beef cutout value was $201.80 per cwt last week, down 7.5% year over year. The general pattern of year-to-year comparisons for Select beef primals is similar to Choice primals, with all Select primals lower year over year. The Choice-Select spread reached the seasonal low in late January at $1.92 per cwt on a weekly basis, two weeks earlier than usual mid-February low. The Choice-Select spread has improved seasonally to $5.14 per cwt in the first week of March. The Choice-Select spread typically increases to the first of two seasonal peaks in late May or early June before dropping in the summer and bouncing back again in the fourth quarter of the year.
Weakness in boxed beef prices does not necessarily mean that beef demand is lower. Beef production is up 5.1% year over year for the first eight weeks of 2020. Beef prices would normally be pressured with higher beef production even with stable demand. Increased beef production is the result of a 1.3% year-over-year increase in cattle slaughter so far this year along with increased carcass weights.
Fed beef production is up year over year with steer and heifer slaughter up 0.7% for the year to date, combined with steer carcasses averaging 19.6 pounds heavier year over year and heifer carcasses averaging 10.6 pounds heavier. In the latest weekly data, steer carcass weights are 26 pounds heavier than the same week last year, with heifer carcasses weighing 13 pounds more compared to last year.
Has COVID-19 impacted beef demand? It’s too early to tell for sure. It is certainly possible there have been some negative impacts, especially on export demand. Impacts on domestic demand may be yet to come. It will be important to watch both demand and supply in the coming weeks to see if the current beef and cattle market expectations will have to be revised significantly. There are a multitude of market factors to sort out including: new trade agreements, macroeconomic changes (stock market, interest rates, etc.), exchange rates, African swine fever and others that will make it more difficult to determine the more direct impacts of COVID-19 on international and domestic beef markets. Stay tuned. 
This originally appeared in the March 9, 2020, OSU Cow/Calf Corner newsletter.
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Derrell S. Peel
- Livestock Marketing Specialist
- Oklahoma State University Extension
