The current government shutdown has caused many weekly and monthly reports to not be published. However, USDA-AMS is still generating their daily and weekly reports. The beef industry knows that tight supplies have led to increased price movements over the last couple of years, but beef demand has become a hot topic as of late due to retail beef prices continuing to set all-time highs every month. These market movements have led to a common question, “could demand be decreasing and that’s why the cutout has been decreasing?” One data series that offers valuable insight into the intersection of beef supply and demand is the cutout value.
Figure 1 shows the weekly choice cutout value for this year, last year, and the previous 5-year average. In mid-September, the choice cutout peaked at $413.60/cwt, has steadily decreased each week, and finished last week at $365.25/cwt. This decline is somewhat expected due to seasonality trends. However, last week’s price was $56.82/cwt (18.4%) and $113.57/cwt (45.12%) higher than last year and the previous 5-year average for the same week. Even though the market has experienced peaks and recent declines in the choice cutout value, year-over-year demand indices suggest historically strong demand as consumers pay higher prices for the smaller amounts of beef available.
Consumers make choices not only between cuts of beef but also grades of beef. Figure 2 shows the monthly cutout values by grade for the last 12 months. Since March of this year, each cutout grade has trended upward through September. Interestingly, the last two months have also had increasing spreads between prime and all other grades. To the question posed in the introduction paragraph, there is little data to suggest weakening demand. Tight beef supplies are driving prices higher and consumer demand is holding strong. Consumers will eat less beef overall in 2025 due to less availability, but the higher prices will allocate the various grades and cuts of beef to consumers.
Figure 1. Weekly Choice Cutout Value
Figure 2. Monthly Graded Cutout Values for the previous 12 months
Martinez, Charley, Parker Wyatt, and David Eli Mundy. “A Check in on the Beef Cutout.” Southern Ag Today 5(42.2). October 14, 2025. Permalink
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