David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service

One of the interesting trends in 2019 was the retreat in the number of carcasses grading Choice throughout a large portion of the year. The decline in Choice carcasses, combined with lower weights and fewer steers sent to market resulted in some very tight supplies of Choice beef and a wide Choice-Select spread through much of the last half of the year. Feedlot performance, weather, time on feed, and finished weights can all contribute to variation in grading. Weekly steer and heifer dressed weights are up over 10 pounds compared to last year.

So far this year, quality grading is totaling a little more Prime and a little less Select. Prime grading is up almost half a percentage point while Select is down 0.6 percentage points. The average weekly change in Choice grading is up just 0.2 percentage points.

While the national total numbers don’t show much change versus a year ago, regional results show much more significant differences. In the second week of January, 13.9 percent of the carcasses in Nebraska graded Prime compared to 11.8 percent the year before. On average this year Prime carcasses are almost 1 percentage point higher than last year. Choice grading is up almost 1.5 percentage points, hitting 75.4 percent Choice in January. Select grading is down a full 2 percentage points this year. More carcasses are grading Prime and Choice in Kansas, while fewer carcasses are grading Select.

The reverse in true in Texas. Prime grading carcasses are down about 0.8 percentage points, averaging 3.3 percent of carcasses graded. About 64 percent of carcasses have graded Choice this year down from almost 69 percent last year. Select carcasses are up to 30.1 percent from about 25 percent last year.

Even with a little more Prime beef on the market compared to last year, the Prime cutout has averaged $230.39 per cwt compared to $223.81 for the first 5 weeks of last year. The Prime-Branded and Prime-Choice cutout price spreads have averaged $12.74 and $18.50 per cwt, compared to $5.89 and $10.20 last year, respectively.

USDA’s next Cattle on Feed report will be published on Friday February 21st. Early pre-report estimates include placements that range from below and year ago to as much as 3 percent above last year. Marketings are expected to be up at least 1 percent, based on higher steer and heifer slaughter, but more fed cattle were imported from Canada in January. Cattle on feed are expected to remain more than 2 percent above a year ago.