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The Weekly News Source for Wyoming's Ranchers, Farmers and AgriBusiness Community

CAB Insider: Market Update

by Wyoming Livestock Roundup

Over the past three weeks, as of Feb. 22, there have been significantly smaller slaughter head counts, with head counts on Feb. 18 as the primary source of change. 

In the past three weeks, Certified Angus Beef (CAB) has seen two Saturdays with fed cattle head counts of 12,000 head each, with the Feb. 18 total at just 7,000 head. These compare to the corresponding Saturdays a year ago, which averaged 36,000 head each.

Carcass weights have become a more important factor in total beef tonnage lately. As seen in the table, steer weights are now 22 pounds lighter than a year ago. 

It’s redundant to continue to focus on winter weather impacts, but this factor is key to the drop in weights. At the end of January, many cattle feeders in northern climates shared cattle had gained very little in the past 30 days.

Beef prices push higher

The combination of smaller slaughter totals and lighter carcass weights across all cattle classes have pushed boxed beef values sharply higher. The quality spreads widened last week as the CAB cutout value increased more readily than Choice, with Select increasing at a smaller margin yet.

The effect of smaller supplies in both cattle and boxed beef markets has a tendency to generate sharply higher spot market values. Realizing the spot market trade volume is quite small during these periods, the net result is still strong in affecting the market direction.

Given the magnitude of the advance in boxed beef values during the week of Feb. 13, it’s unsurprising most cuts from the CAB carcass report moved higher. 

Notably, in the middle meats, ribeyes made an abrupt turnaround to the upside after correcting 16 percent lower since the first of the year. 

Buyers looking for bargains on strip loins missed their chance in December, as 0x1 strips have advanced from $7.80 per pound to $9.10 per pound wholesale since Jan. 1. 

Tenderloins have priced sideways for three weeks, but at $14.95 per pound wholesale, they are record-high for this time. The current price of $14.95 per pound is $2.90 per pound higher than a year ago.

Chuck rolls and inside rounds made notable upward price moves during the week of Feb. 13, and it’s projected this will be the general direction into the spring. Ground beef prices have been a bit softer to steady with a similar upward price pattern in the near future.

Cattle Contract Library pilot kicks off

The U.S. Department of Agriculture’s (USDA) Cattle Contracts Library pilot program kicked off with the first report on Jan. 7. The program’s intent is to enhance price transparency in fed cattle trade as a provision of the Consolidated Appropriations Act of 2022. 

Individual packing plant locations harvesting no less than five percent of the total U.S.-fed cattle supply annually are required by law to submit contract information. 

According to USDA, the provision encompasses 18 packing plant locations operated by four packing firms, which represent a total of approximately 85 percent of the total fed cattle packing volume.

In 2022, about 70 percent of fed cattle sales were reported as either formula or forward contract.

A look at the weekly reports on record thus far reveals few surprises. 

Data from the week beginning on Feb. 13 shows 75 percent of these contracts establish the base price through USDA reports, primarily the Nebraska, Kansas and Texas/Oklahoma regional reports. 

Another 10 percent use CME contracts to establish the base price, with nine percent negotiating the base and the final four percent using the top of the market as the base. Confidentiality requirements result in the sum of these percentages falling short of 100 percent.

Of further interest, adjustments to the base price were applied to 70 percent of the contracts reported, with the adjustment averaging $1.23 per hundredweight (cwt). Base price adjustments of this type are a well-known feature of the market. 

The bottom quartile value of these adjustments was just $0.50 per cwt, and the top quartile average was two dollars per cwt applied to the base.

Contract specs

Contract specifications may be the topic in the library previously least understood by the greater cattle-producing industry. The specification list is too lengthy to detail here, but the majority of the specs are relative to carcass grading and other carcass traits. 

Leading off the list, unsurprisingly, was the quality spec with 88.76 percent of contracts featuring this component. With no further detail included, we’ll assume Quality Grade is the measure this refers to. 

Further down the list, ranked sixth for prevalence is the branded spec – for which we’d assume the Branded Beef Program – with 49.44 percent of contracts including this spec. The CAB brand is the only brand listed in the detailed premiums and discounts pricing information.

While there are several styles of contracts represented in the library, perhaps the take-home message is there are fewer mysteries within the library than one may have thought. 

Carcass outcomes are widely emphasized in the contract mix, and quality is the largest driver of premiums and discounts. This is very similar to what we see in the grid marketing arrangements offered more openly to feedyards.

There are many specification traits of importance, and it would be advantageous for cattlemen to take a closer look at the additional information.

To access the library, visit and type in the “Slug ID” number 3663.

Paul Dykstra is the director of supply management and analysis at CAB. He can be reached at

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