Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 9/22/2014
Temporary Short Supply of Soybeans Forces Meal Higher

Cash (Decatur, IL) soybean meal rail prices hit new record highs the last week of August this year and have remained higher than the previous record for three straight weeks. The last record high was $579.10 per ton set the same week as this year in August in 2012. This year surpassed that record by over $14 per ton, reaching $593.20 per ton. Similar to 2012, weekly cash prices have eroded and marks the transition in the cash market from old crop to new. Cash meal prices should continue to drop precipitously as harvest moves throughout the major soybean growing regions.

Beef Carcass Cut Component Values Changing

A beef carcass is fabricated into seven primal cuts, specifically the brisket, chuck, flank, loin, rib, round, and short plate. The USDA-Agricultural Marketing Service (AMS) derives values for primal cuts from a weighted average of the associated sub-primal (wholesale cut) reported prices. USDA-AMS then calculates a carcass cutout value using the percentage yield contribution (PYC) to the total carcass weight and calculated value of each primal cut. According to USDA-AMS for the week ending September 13th, the Choice loin primal cutout value was $312.61 cwt.

How Are Beef Carcasses Grading?

Quality grades (Prime, Choice, Select, and Utility) are an important dimension of the U.S. beef market. Fed cattle sold on grids have premiums and discounts tied to quality grade, the most followed is the Choice premium over Select. Both demand and supply aspects of the market drive price premiums, the supply side is gaged by the USDA-AMS reported percentage of Federally Inspected carcasses in each grade.