US wholesale beef prices have risen sharply in recent weeks as reduced slaughter activity tightens near-term supply.

Choice cutout values have added $21 per cwt over the past two weeks to reach an average of $386 per cwt, the highest level since September.

Seasonal demand is contributing to the price increase, but tighter supply conditions are also playing a role. Packers have reduced slaughter schedules as they face sustained margin pressure.

Processors are estimated to have lost around $300 per head on average last month. In response, slaughter levels have fallen noticeably. Federally inspected cattle slaughter has averaged fewer than 520,000 head per week since mid-February, with combined steer and heifer slaughter dropping below 420,000 head.

Marketings of fed cattle have also declined. January marketings were down 13% year-on-year and February is projected to show a 6.1% annual decline based on daily slaughter estimates. First-quarter marketings are expected to fall about 8.5% from last year, marking the largest quarterly year-on-year decline since the second quarter of 2020.

Despite the current tightness, beef availability was relatively high last year. Domestic per-capita availability reached 56.6 pounds on a boneless weight basis, the highest level since 2010. Strong imports and weaker exports supported domestic supply.

That dynamic is expected to change this year. Net trade flows are unlikely to offset declining US beef production, and domestic per-capita availability is projected to fall 4% compared with 2025. If realised, this would bring annual supply to the lowest level since at least 2018.

Some signs suggest cattle supply pressures may gradually ease later in the year. Cattle-on-feed inventories were down 3.2% year-on-year at the start of January, but the deficit narrowed to 1.8% in February and is expected to tighten further in March.

Even so, the near-term supply situation remains tight as reduced slaughter continues to support wholesale beef prices.


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