The chart of the week is the weekly USDA choice boxed beef cutout which is an index of choice beef prices. The choice boxed beef cutout has hovered at relatively inflated levels for roughly 8 weeks after trading at historically low levels earlier this year. As noted in the Weekly Commodity Report, the USDA choice boxed beef cutout is anticipated to depreciate during the next few months. Why? Well weekly beef production typically rises into the deep spring remaining relatively strong well into the summer. In addition, once the Memorial Day Holiday demand pipelines are filled and then refilled, beef demand has a tendency to wane. Finally, several other factors should help influence beef prices lower including the challenged US economy, inflated fuel prices and fairly adequate alternative protein supplies. However, beef buyers should take notice of any forthcoming decline in prices. Inflated feed costs, among other factors, are anticipate to limit the supply of slaughter ready cattle later this year which should mitigate overall beef production. If the choice beef cutout declines into the low 140’s or below, it may be the least expensive choice beef prices we experience for some time to come. We can help you manage your beef and other commodity projections and contracts. If you would like to learn more please call 888-423-4411.
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