Page 25 - MWC 10-6-2022s

Will Quality Premiums Continue Higher? The Midwest Cattleman · October 6, 2022 · P25

Late fall holiday demand Choice and Prime beef produc- pared to 34.7%
heats up the cattle market, tion volume is monumental- a year ago. That
and that’s when high-quality ly larger than it was in 2006 decreased the
carcasses get extra bragging when just 14% of Angus-type brand’s weekly
rights. carcasses met CAB specifica- carcass supply
Demand alone doesn’t spur tions. That pales in compar- by 7.5% in the
prices higher, there must ison to our latest annual av- recent four-week
be a degree of supply con- erage of 36%. But even small period.
straint to get dollar values drops from record-high pro- Both CAB and
moving. That’s the part of the duction volumes create supply Prime (including
high-quality market equation concerns among grocers and CAB Prime) car-
that is generating some uneas- restaurant partners in today’s cass production
iness as USDA quality grade demand-driven environment. volumes remain
trends disappoint. Our brand This brings a focus on car- the third largest
standards rely heavily on Pre- cass quality premium trends on record in re-
mium Choice and Prime qual- in the rapidly approaching cent weeks. Yet,
ity grade product, and 2020 fourth quarter. While we ex- the Prime cutout
data shows that over 80% of pect seasonal quality grade im- and derivative
carcasses fail to meet our re- provement in October there’s Prime grid pre-
quirements due to insufficient no guarantee this develops miums suggest
marbling. sufficiently to meet market de- early fall supply/
In the past 15 years, beef de- mand. The total USDA Choice demand imbal-
mand has improved dramat- category recently slipped to ance. The news
ically, built on revolutionary 71.3% of fed cattle carcasses, for cattlemen is
carcass quality improvement. down 1 percentage point from that the Prime grid premium, higher than this time in 2021.
I mean “quality grade,” spe- a year ago. This is relatively which typically peaks in the There is plenty of runway
cifically, and that has allowed minor compared to the USDA fourth quarter, is out of the ahead for further advance-
our brand to use science-based Prime and CAB brand declines gate early this year. The cur- ments in the Prime premium
specifications to successfully versus the past two years. In rent $29/cwt. Prime carcass as demand for highly marbled
build a following. It’s easy to early September, CAB carcass premium is $8/cwt. higher middle meats heats up in the
forget that today’s Premium certification was 31.9% com- than a year ago and $19/cwt. continued on page 27

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