US beef demand rebounding

Adding support to strong cash-cattle prices, wholesale beef prices in the US are climbing again this week indicating demand is returning to the marketplace.

USDA reported the Choice cutout averaging US$152.52 per hundredweight on Tuesday (Mar 16), up US$1.69 from Monday (Mar 15) and up US$3 from a week earlier. The Select cutout on Tuesday averaged US$150.71.

Live-cattle sales last week topped US$94 per hundredweight and analysts believe that continued strength in beef and a growingly optimistic futures market will support prices at that level or higher.

With reference to individual cuts and products, the average price for the Rib primal last week was up 12% from a year ago, Round up 9.2%, Chuck up 13.2%, 50% lean trimmings up 7.3 %, 90% lean trimmings up 17.2 % and hide/offal up 69 %.

Those figures were again up this week, with the Rib primal on Tuesday gaining about US$4.50 per hundredweight over last week's average and Chuck and Round each improving by about US$2 per hundredweight.

Feeding margins are finally climbing well above breakeven. Last week's Sterling Profit Tracker shows feeding margins for the week ending March 6 gaining another US$10 per head to average more than US$100 per head in profits.