Demand remains key to high cattle prices

So far in 2023, retail all-fresh beef prices have continued to increase, especially since July, with September at $7.82/lb., a new record high monthly retail price. Retail all-fresh prices have averaged 6.6% higher year over year (4.0% higher in real dollars) in the July-September period. Since July 4, weekly Choice boxed beef prices have averaged $307.16/cwt., ranging from a low of $299.94/cwt. to a high of $321.97/cwt. Choice boxed beef prices have averaged 18.4% higher year over year through the third quarter of the year. With beef production projected to be down more than 5.5% year over year, per capita beef consumption is expected to decease to 57.0 pounds this year.

Figure 1 shows weekly prices for several Choice wholesale middle cuts in 2023. Tenderloin and ribeye, the two highest value cuts have held steady through the year and are beginning increase seasonally into the fall. Other steak items that are seasonally highest for summer grilling, including strip loins, sirloin, and tri-tip have decreased from summer highs but are generally following normal seasonal patterns.

Figure 2 shows weekly Choice wholesale chuck and round products. These items all generally held steady through the first half of the year and are increasing in the second half of the year. This likely reflects both seasonal tendencies and tightening beef supplies. It is common for roast items to increase seasonally when cooler weather brings out the crock pots.

There are certainly plenty of macroeconomic and geopolitical uncertainties to keep the industry nervous about beef demand. However, the increasingly high quality and consumer preferences for beef continue to be reflected in strong beef demand. These factors, combined with tightening beef supplies, will keep wholesale and retail beef prices strongly supported in the coming months.