CHICAGO Jan 9 The price of choice-grade U.S.
beef at wholesale set a new record on Thursday as already tight
supplies were further squeezed by harsh weather that reduced the
number of cattle that came to market in parts of the country,
Select beef cuts on Thursday also marked a fresh record high
for a fifth straight day.
Choice beef typically has more "marbling" or fat, making it
juicier and more tender than select-graded beef.
The day's wholesale price, or cutout, for choice beef hit
$212.05 per hundredweight (cwt), eclipsing the previous May,
2013 record of $211.37, according to the U.S. Department of
USDA pegged prices for select wholesale beef at $209.05 per
cwt, almost $2.00 higher than Wednesday's record.
"Tight beef supplies is the underlying principal factor,"
said University of Missouri livestock economist Ron Plain.
Packers hiked the price of beef it sells to grocers and
restaurateurs after last week paying up to $138 per cwt for
slaughter-ready cattle in the U.S. Plains - also a record high,
The U.S. herd at a 61-year low after years of drought forced
processors to spend more for supplies. Additionally, ice and
snow-packed roads snarled transportation of cattle to packing
Accompanying temperatures at historic lows slowed down
cattle weight gains, making them less available to major meat
processors such as Cargill Inc and Tyson Foods
"The weights have been coming down and we started placing
fewer cattle in feedlots last summer, so eventually we had to
tighten supplies up," said Steve Meyer, president of Iowa-based
Economists said record-high beef cutout values should come
as no surprise given the scare supply situation that could keep
retail beef prices at or near record highs through 2014.
Retail beef prices in November climbed to $5.41 per lb,
topping the $5.36 October record, according to monthly data
compiled by USDA that will be updated on Jan. 16.
Analysts and economists said recent changes in the way USDA
calculates the wholesale price for specific cuts of beef likely
helped drive up the overall cutout value.
"I thought it made about $2 per cwt difference. The real
story is we're not going to have as much beef this year as we
had last year," said Meyer.