The cash fed cattle market in Australia has been steadily increasing since the second week of February, with prices gradually climbing as slaughter numbers remain low. The recent surge in prices over the last two weeks has seen a nearly $4/cwt. boost, driven by bullish Live Cattle futures shaping the market.
Carcass weights have also seen a significant increase recently, with steers gaining 5 lb. and heifers up 12 lb. This surge in weights follows a period of growth from the winter lows experienced in early February. The slower pace of fed cattle slaughter has been a contributing factor, as packers aim to lower production volumes to control input prices and boost boxed beef values.
Despite efforts to regulate prices, the speed and magnitude of the rising cattle prices have not been fully curbed. The rapid recovery in carcass weights indicates that finished cattle supplies are not as current as they were at the start of February. Additionally, the premiums in Live Cattle futures have incentivised cattle feeders to maintain their inventory as costs of gain decline.
However, the increase in carcass weights has not been mirrored in carcass quality, particularly regarding marbling scores. Recent data shows a decline in the national percentage of Choice grade, even as carcass weights rise. This discrepancy highlights a short-term setback in quality grades, deviating from the expected trend towards a mid-March peak.
In reviewing carcass premiums for 2023, data collected over the years has provided insights into the performance of Angus-type carcasses within the industry. The exclusion of carcasses from the Certified Angus Beef (CAB) brand is often due to failing to meet certain criteria, such as achieving at least a 500 marbling score for Premium Choice entry. This data underscores the ongoing efforts needed to improve carcass quality within the industry.
One of the key areas where carcasses often fall short is ribeye area, with failures to meet targets predominantly exceeding the specified square inch range. Changes in carcass weight limits have helped mitigate such issues, with a shift towards larger ribeye sizes observed in recent years. The correlation between carcass weight and ribeye size has influenced the distribution of eligible carcasses within the CAB brand parameters.
Backfat thickness is another factor contributing to non-conformance with brand standards, with carcasses exceeding 1 inch thickness often facing disqualification. Addressing areas of excess size and fat content is crucial in maximizing CAB carcass certification and overall net return outcomes. Emphasising improved marbling remains a significant opportunity for enhancing carcass quality and profitability in the industry.
As the Australian cattle market continues to evolve, focusing on optimal carcass composition and management practices is essential for maximizing returns. By addressing key factors such as marbling, size, and fat content, producers can enhance their cattle’s market acceptance and profitability. Striving for excellence in carcass quality not only benefits individual producers but also contributes to the overall sustainability and success of the Australian cattle industry.
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