With rising unemployment and expected slower economic growth, cattle industry observers are watching for indications of weakness in consumer beef demand.

Even with cattle prices near record levels and the Choice boxed beef cutout value holding above $3 per pound since mid-May, some consumers are opting for ground beef over pricier steak cuts.

Monitoring USDA wholesale price data for different cuts of meat can shed light on which components of the carcass are most affecting overall beef value, and identify trends in consumer behavior.

Although USDA tracks daily prices for seven different beef primals, four of them — the chuck, round, loin and rib — account for 85% of the beef cutout value calculation.

Examining prices for the first three weeks of July, dating back to 2004, shows that this year, the round primal has posted a sharp increase in value relative to the value of the entire boxed beef cutout (+15.7% versus 2023, and 5.6% above the 2015-19 average). Chuck values are also relatively higher, while those for the loin and the rib have decreased.

What does this say about the strength of beef demand?

When demand for ground products is running relatively strong, the chuck and round primals tend to benefit.

Beef demand trend influencers

Round values particularly thrive when leaner trimmings are sought after. Over the past 10 weeks, 90% lean fresh beef trimmings set new price records, and the ratio of 90% lean to 50% lean trimmings values has been above the historical average for most weeks.

Historically, during the first three weeks of July, the round primal has shown relative strength against the entire beef cutout in 2008 and 2011, years when U.S. GDP growth was negative and beef demand was weak.

However, in 2015, despite high beef prices, the relatively higher round primal values were more of a supply story, as cattle herd rebuilding reduced cow slaughter and limited trimmings availability.

So, what does this mean for 2024?

Likely, a little of both.

Not an easy call on consumer prices

Demand for higher-value beef cuts may be weakening a bit as some value-conscious consumers replace steak with more ground beef. But it is also true that cow slaughter is down substantially, leaving tighter trimmings supplies once again, even with a jump in beef imports.

As usual, the extent to which demand and supply are each influencing the current situation will be tough to know until after the fact.

If supply is the primary driver, expect further upward pressure on cattle and beef prices as herd rebuilding tightens beef availability. If demand is having a bigger impact, we could see prices ease as consumers place a more careful watch on their spending.

Brown is a livestock economist with the University of Missouri. He grew up on a diversified farm in northwest Missouri.