US winter weather fails to cut choice beef carcasses

Harsh winter weather is being blamed for cutting fed-cattle weights in the Plains, but it has failed to affect the percentage of beef carcasses that grade as choice.

 

Choice grades are considered to be higher quality than select since they have more inter-muscular fat, which produces a more tender, juicy and flavourful eating experience.

 

Wholesale prices for choice-grading beef and the lower-quality select beef are narrowing seasonally, but economists and market analysts agree the increased production of choice product versus select is part of the reason.

 

That could encourage a slide in beef demand away from select and toward choice, since the cost is similar. Grocery shoppers may see more choice beef in their stores while the choice/select spread is narrow.

 

During the winter, less of what feedlot cattle eat will be turned into muscle, bone and fat as a larger percentage is used to survive, university beef specialists say. The result will be a lighter-weight, but not a lower-grade, animal going to slaughter.

Parts of the Plains have experienced a succession of blizzards, with high winds, very cold temperatures and heavy snow. Nebraska has been especially hard hit, over the last one-and-a-half, parts of Kansas and Texas have been hit with their own storms, which have not been as harsh but were wetter.

 

Statistics provided by Jim Robb, agricultural economist at the Livestock Marketing Information Centre, show that as of the first week of February, the percentage of beef carcasses that graded choice was at 63.5%, compared with 60.38% last year and the 2004-08 average of 54.6% for the same period.

 

The problem among cattle traders, market analysts and beef scientists is that nobody can agree on an explanation for why the percentage of choice-grading beef carcasses is up.

 

Robb said the industry has shown a tendency to produce a higher percentage of choice carcasses over the last two years. This is faster than would be expected through genetic changes alone, and he credits this in part to improved training of USDA graders and the rising use of electronic carcass-grading technology.

 

Many packing plants now have an electronic system, but not all use them as the primary grading source, said Ty Lawrence, director or the beef carcass research centre at West Texas A&M University. He said theories that such systems already were changing the grading toward more choice carcasses lacked evidence.

 

But a Texas feedlot manager said the biggest change he knew of within the last two years is the addition of electronic grading at the plants. He, therefore, credited a lot of the change to the systems.

 

The higher production of choice beef in relation to select is part of the reason wholesale prices of the two are narrowing, market analysts said. But it is not the whole picture.

 

There is a strong seasonal tendency for the choice/select spread to narrow at this time of year, the analysts said. They credited a winter shift in consumer preferences toward select and away from choice beef for the narrowing spread. Spring's warmer temperatures and increased grilling activity tend to shift demand back toward the choice product.

 

Over the last couple of years, however, that bottoming tendency in the choice/select spread has tended to languish into March, said Don Close, economist for the Texas Cattle Feeders Association.

 

In addition to what many see as a shift in grading, the analysts and economists thought they could see a change in consumer demand based on the economy and the way shoppers are adjusting their purchases to fit their budgets. This increases demand for the lower-priced select product and reduces demand for choice.

 

That general shift could continue to carry the narrow choice/select spread into March again this year before seasonal demand for choice beef widens it out, the analysts said.