Summary
Despite the 4% decline so far in overall beef production, our models suggest that prime and choice beef output are somewhere around 3% higher than a year ago.
Analysis
As noted in the latest issue of the Weekly Commodity Report, the percentages of cattle grading choice and prime are trending well above average levels for this time of the year. And as written in previous notes, despite the 4% decline so far in overall beef production, our models suggest that prime and choice beef output are somewhere around 3% higher than a year ago. If you compare 2009 to 2007 thus far, choice and prime beef output this year are more than 10% greater than 2 years ago. In short, there is a lot of choice and prime beef available. Now it’s true that the US cattle herd is contracting and beef production levels could be down for some time to come. But the trend of more cattle grading choice and prime appears to be solid which, if it continues, could notably dampen any inflationary impact on many beef markets going forward.
