Chart of the Week

Dr. Curt Lacy (UGA)

Recently calf prices have been the highest in several years. The primary driver behind the higher calf (and slaughter cattle) prices has been the very strong wholesale price of beef.
2011 02 04 boxedbeeffeb2011
The boxed beef cutout value is the industry term for the weighted-average wholesale price of beef. In other words, the different wholesale values of the loin, chuck, round, brisket, etc. are each assigned a “weight” that reflects their relative proportion of a beef carcass.

The main point is that in recent weeks we have seen composite wholesale prices above $170-a level above which we have only ever exceeded twice and that was last year! The implications are that combined with last week’s favorable cattle inventory report and improving consumer demand, prices should remain very favorable for the forseeable future. While persistent prices above $170 is not a given, wholesale boxed beef prices should remain above $160 for quite some time.

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