CAB Market Update

Starting with the Martin Luther King Jr. holiday, the federally-inspected cattle harvest suffered a big setback, with the total reflecting a 10,000-head deficit compared to Jan. 20-23 totals. 

The winter storm in the South is noted as a slaughter-reduction impact on Jan. 23, but the head count was just a few thousand short of recent Jan. 30 production totals, reflecting 35-hour week schedules.

Tyson’s published intention to close the Lexington, Neb. plant and remove one shift from the Amarillo, Texas plant by Jan. 20 caused another shift in the supply chain.

Fed cattle prices reported 

In fed cattle prices, the last week of January values were slightly stronger, with the top end of reported prices in the $236 per hundredweight (cwt) range. 

The February Live Cattle Contract was valued at $235 per cwt early in the week and consequently provides no directional guidance beyond current spot market news.

Compared to analyst expectations, the Jan. 23 Cattle on Feed Report held no surprises, as the Jan. 1 head count was 3.2 percent below a year ago. 

The ninth consecutive month of year-on-year declines in placements saw December 2025 placements 5.4 percent smaller than in December 2024. This larger December marketing number, 1.8 percent higher than a year ago, reflects an additional marketing day in the month but a net daily marketing volume smaller than a year ago.

Carcass cutout values have primarily increased in January, although the last week of January’s average Certified Angus Beef (CAB) cutout value is shown as a few dollars cheaper as the quality spreads narrowed. 

It should be noted Urner Barry’s $9.78 per cwt Choice-Select spread is double that of the U.S. Department of Agriculture’s reported value for the week. 

This is due to nuances in how the two entities capture and have the data weighted in weekly information.

Seasonal demand shifts 

As January wraps up, it’s apparent the month’s carcass cutout values have held up quite well in relation to December values. 

Through the last week of January, the CAB cutout price was just three dollars per cwt cheaper than a month ago by less than one percent. 

Evaluating the steer and heifer harvest totals shows much smaller weekly totals in January than in early December, creating a significant supply difference relative to demand.

It is often said January is the lowest beef demand month of the year, while February likely vies for the second lowest, with the exception of a Valentine’s Day uptick. Also, there is often seen a shift in consumer preference away from holiday middle meat roasts toward end cuts for comfort food meals.

Price adjustments across a variety of beef cuts are quite dramatic from the fourth quarter into the first quarter of the year. For instance, the wholesale price of the CAB lip-on ribeye roll has been 20 percent cheaper in the first quarter than it has been in the fourth quarter for the past five years. 

The January ribeye roll price downshift has been substantial with a 25 percent decline from the December average. This action has placed ribeye values slightly lower than in the previous three Januarys.

The seasonal downturn for tenderloins is similarly sharp, with an 18 percent price decline from December to January.

So far, the characteristic January increase in demand for end cuts has occurred with all of the round primals either maintaining an elevated price or undergoing sharp increases. Roasting cuts from the chuck have also posted big increases, aligning with the expected January trend.

These shifts in demand affect price spreads based on carcass quality, as the cuts commanding the highest per-pound premiums lose some seasonal demand through the first quarter. 

As cattlemen observe the current market there are questions about the decline in the Choice-Select spread and further premiums for CAB and Prime cutout values. 

Some have suggested demand for premium Choice CAB and Prime carcasses is possibly waning. 

However, it’s perfectly natural this time of year as the total rib primal price drops from 170 percent of the cutout price to 125 percent, and the loin drops from 132 to 126 percent. 

Meanwhile, the chuck has increased from 82 to 92 percent of the cutout price and the round elevated from 79 to 84 percent of the cutout in the December to January price changes.

Looking ahead to March, carcass quality grades should build toward the annual high percentages for the share of CAB and Prime carcasses. Potential to test or break recent records for high-quality grades is possible late in the first quarter. 

However, a very limited fed cattle harvest is at the top of the issues list during this period, so the likelihood of an overabundance of quality carcasses may very well be countered by small head counts. It promises to be an interesting season for premium beef supply.

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