Strong calf prices finish the year

Cattle and beef markets are wrapping up the fourth quarter on a very strong note – especially for smaller animals. Calf prices for 5-6 weight animals in the southern plains have advanced better than $50/cwt in the last four weeks. And prices for 4-5 weight animals have moved further. The fall run is apparently over.

Prices

Live fed cattle prices remain strong with cash trades better than $190 but prices for the year look range-bound to me between $180 and just better than $190. The boxed beef cutout value is holding better than $300 with a mix of performance at the primal level. Rib prices have been seasonally outstanding, and tenderloins have also been strong. Loins are showing some seasonal weakness as is ground beef. End meats are showing solid price levels but not much in terms of improvements. Once the market retreats from the strong rib purchases, and the Choice-Select spread seasonally softens, much will be determined by Chucks and Rounds. Also, this will be the period the market moves into the time of year when packer margins are the weakest. My point? The strong finish to the year in calf prices has little to do with what is going on downstream.