Boxed beef cutout values saw declines in December, and University of Tennessee ag economist Andrew Griffith says 2020 was a year of significant price fluctuations.
“The wholesale beef market has been a rollercoaster ride most of 2020, and no season has been able to stop the price fluctuation,” he says in his weekly market outlook.
Choice boxed beef prices have illustrated the unpredictability and ups-and-downs.
“If one were to start evaluating Choice boxed beef prices at the beginning of July, there would be no evidence of the coronavirus-induced price escalation,” Griffith says. “However, Choice beef was just over $202 per hundredweight at the end of July before it made a four-week run and approached $230 for a weekly average price. This was again short-lived as prices declined $14 per hundredweight in three weeks and then traded back down to $207 by the end of October.”
The price movement has continued, impacted by the latest news on exports and the impacts of the pandemic on demand.
“Not to be outdone, four weeks later the weighted weekly average Choice boxed beef price exceeded $243 at the end of November,” Griffith says. “The last three weeks have resulted in another decline, which looks to be in the $35 per hundredweight ball park and the lowest prices since August. Prices may continue to move lower, but lower prices will not stay around long.”
Griffith says supply and demand will continue to shape cattle markets going forward.
“There are the general indicators in the futures market, which are essentially attempting to find a price equilibrium based on expected supply and demand of live cattle and feeder cattle. However, these markets are also attempting to institute supply and demand fundamentals of beef and calves into the price determination,” he says.
Of course, individual circumstances can determine livestock prices on any given day.
“Though the futures market tends to be a good starting point, it does not determine the final price of an animal at a local auction,” Griffith says.