All four categories averaged higher prices on the new series for the comparison period. This change in grading relative to last year is also reflected in Figure 4. Notice that the percent of US cattle grading Choice in 1999 has been 2-2.5 percent lower than the year before. The percent with a Yield Grade 1 or 2 had been lower until April when they were similar. The live price reported by USDA for steers and heifers incorporates the lower quality grade.
Several factors go into determining the spread between live prices and wholesale carcass prices.
The spread is at its widest point in more than ten years. While it is easy to list possible reasons for the differences, it is difficult, if not impossible, to accurately determine the specific values. This spread should narrow when the Choice Select and grading improves. While live prices are not as high relative to boxed prices as a year ago, they are still expected to follow boxed prices higher or lower over the weeks ahead. Seasonally, the odds favor lower prices as we move into the summer.