CAB Market Update

by Paul Dykstra

The fed cattle market has traded in a steady range around $235 per hundredweight (cwt) live and $372 per cwt dressed in the past two weeks, roughly $10 per cwt lower than the late February high on a live basis.

The post-report adjustment to the harvested head count two weeks ago pulled that week’s total to a paltry 503,000 head. 

The last week of March’s recovery to 520,000 returned the harvested throughput to the lower end of the range seen in the previous four weeks, with an average of 524,000 head per week for the period.

The JBS Greeley, Colo. plant remains closed for the third week now due to labor stoppages at the facility. 

This, combined with the general tightening of packer throughput, continues to impede harvest volume.

Feedyard inventory slips

Meanwhile, feedyard cattle inventory currentness appears to be slipping further as combined steer and heifer carcass weights marked a new record high in the latest U.S. Department of Agriculture (USDA) report for the week of March 8. 

Steer weights matched their previous high, recorded in December at 989 pounds each, while heifers surpassed their December heaviest weight by three pounds to reach 903 pounds apiece.

Weighted average carcass weights for steers and heifers calculate to 955 pounds, 43 pounds heavier than the same week last year. 

The added weight-per-head on 420,000 head of weekly fed cattle harvested is equivalent to an additional 18,900 head. More astonishingly, the latest weights are 67 pounds heavier than those from two years ago, equivalent to an additional 29,500 head at the recent harvest pace.

Carcass cutout values adjusted slightly lower over the past two weeks following an exceptional first-quarter run-up, during which the USDA comprehensive cutout value increased 12.7 percent since Jan. 1. The comprehensive cutout, describing all grades for all delivery periods, reached $400 per cwt in mid-March, a tremendous 21 percent increase over the same week a year ago. 

A small correction is certainly understandable at the beginning of April, immediately before Good Friday and Easter holidays. However, packers do have some pricing power to leverage with their wholesale customers at these reduced harvest head counts.

Spring cutout confusion

Seasonal shifts historically bring the year’s highest-quality, marbling-rich carcasses to packing plants in March. This phenomenon is often attributed to the finished cattle supply in this period being denser with yearlings than with calf-fed cattle, compared to other seasons.

Specific to March 2026, the share of USDA Select carcasses in packers’ coolers was disproportionally small. 

The beef sector’s rapid advance toward a 15 percent USDA Prime grade average in March came at the expense of Select, which dipped to a record-low 7.9 percent of the offering. This stands in stark contrast to the 12 percent Select gradeout in March 2025. 

Meanwhile, the Choice category remained unchanged this March at 73 percent of the mix, just as it was a year ago.

During the last week of March, USDA reported the Choice cutout dipping to a five dollars per cwt discount to Select.

Inversions of the Choice-Select spread, while extremely uncommon, tend to occur in the first quarter, when carcass quality grades are near their annual peak and spot market demand for the grilling season has yet to hit full stride.

There are end users in the market, such as the institutional sector, which maintain a standing order specifically for the USDA Select product. 

This price-driven customer capitalized on an average $15 per cwt discount to Choice in the past two years. 

The recent shift to much tighter Select carcass supplies has narrowed the price gap, even momentarily inverting the Choice-Select spread due to the scarcity of Select carcasses.

Current quality grade trends are subject to seasonal change, but the long-term outlook suggests the combination of genetics and management will continue to yield higher-quality carcass outcomes. 

Beef wholesalers are advising their traditionally Select-focused customers to move up to low Choice, given the evolution of the grade mix to a higher plane.

Product labeled simply as USDA Choice has increasingly been defined by carcasses which fall within the lower one-third of the Choice grade. This is due to overwhelming demand for Premium Choice-branded products, such as the Certified Angus Beef brand. 

Consequently, what’s left in the USDA Choice box looks much nearer to the marbling found in USDA Select than ever before.

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