The price of beef is DIRECTLY PROPORTIONATE to the price of feeder cattle on the hoof. And it always has been.
There is no conspiracy to mark up by the processors. Their costs are relatively static and their revenue/profit depends on volume.
As prices go up, volume goes down.
This is not gasoline. People have several options for animal protein.
“This is not gasoline. People have several options for animal protein.” and we are happy for that.
I have not done a complete carcass value breakdown to figure out where it all goes and for what price. I am sure someone has in both the industry and university. I don’t want to do that, too complicated.
A cow on the hoof will dress between 42 and 49%, the bigger the better. Divide the on the hoof price by those numbers and you get the producer’s contribution to the shelf price.
I spent 45 years in the petroleum industry. It surprises me that the price of fuel does not go down at all with the price of crude but it does of course and mostly in lock step up and down. It is the most price variable product compared to its necessity that I am aware of.
An 1150 lb steer comes out pretty close to this:
On Hoof 1,150.00
Typ Carcass 714.0
Typ Yield 568.0
Round 123.8
Top Round 34.6
Bottom Round 31.2
Tip 16.8
Rump 7.8
Stew, GB 33.4
Loin 89.2
Porterhouse 19.6
T-Bone 9.8
Top Loin Stk 6.8
Sirloin Stk 30.3
GB 22.7
Flank 90.9
Flank Stk 3.6
GB 87.3
Rib 57.3
Rib Roast 23.0
Rib Stk 9.2
Short Ribs 8.6
GB 16.5
Plate 7.6
Stew, Sht Rib 7.6
Chuck 170.3
Blade Roast 33.9
Arm Roast 35.5
Cross Rib Roast 25.4
GB 75.5
Brisket 16.0
Boneless Brisket 16.0
Shank 8.0
Shamk Roast 8.0
Miscellaneous 4.9
Kidney 4.9
Packaged 568.0
Fat and Bone 146.0