The Choice cutout is the USDA's daily estimate of what a Choice grade beef carcass is worth on the wholesale boxed beef market. It is published every afternoon in the LM_XB403 report from the USDA Agricultural Marketing Service, around 3 PM Central time (4 PM Eastern), and it is the single most watched number in the U.S. beef trade.
The number itself is built from negotiated daily sales of boxed beef sub-primals, the cuts that come out of a packing plant after fabrication. Each sub-primal carries a yield share, the percentage of the carcass weight it represents. Sale prices for ribs, loins, chucks, rounds, briskets, plates, and flanks are weighted by those yield shares and added together to produce a single dollar value per hundredweight (cwt). The print level varies materially with the cattle cycle: through the 2010s and early 2020s it ran in the $200 to $300 per cwt band; the herd-contraction cycle that began in 2023 has pushed prints to the $350 to $400 per cwt range in 2025 and 2026. Higher-end values typically show up around grilling holidays, with seasonal lows in the post-holiday lull.
Two nuances make the cutout feel slippery to a newcomer. First, the cutout is not a transaction price. No one buys "a Choice cutout." It is a synthetic value built up from the underlying primals, useful as a single read on the direction of the wholesale beef market and as the anchor against which retail buyers and packers negotiate. Second, the cutout is reported one session in arrears in practical terms. Sales transacted today usually flow into the next afternoon's print, so the headline number a buyer reads on Tuesday is built mostly from Monday's negotiations.
Why buyers watch it
Retail buyers, foodservice distributors, and packers all watch the cutout for different reasons. A retail buyer planning a feature program for two weeks out wants to see whether the cutout is firming or easing, because the bid that arrives from the packing plant tomorrow morning is anchored to the cutout's recent trajectory. A foodservice distributor uses the cutout as a sanity check on quoted contract prices, especially when negotiating cost-plus arrangements. The packer watches it because a rising cutout against flat live cattle prices is what improves their margin, and a falling cutout against firm cattle costs is what compresses it.
The day-on-day move is informative but routinely small, often under a dollar per cwt. The week-on-week move and the cutout's position relative to the same week of the prior five years carry more weight for planning. When the Choice cutout sits two or three percent above its five-year seasonal norm, that is usually the result of either tighter slaughter, stronger grilling demand, or a feature pull from large chains. When it sits below norm, the read is most often demand softness or a temporary bulge in production.
What the cutout does not capture
The cutout is a wholesale read. It does not capture retail margins, freight, packaging, or the basis a particular buyer sees from their packer relationship. Two buyers reading the same Choice cutout print can be looking at very different actual costs because their formula contracts attach different basis values to the cutout itself. The cutout is also limited to boxed beef. It does not include cow beef (a separate report, LM_XB405), chemical lean trim items (priced individually), or ground beef (which mostly trades at retail rather than wholesale).
For day-to-day position management, most buyers anchor on the cutout but watch it alongside the negotiated load count published on the same report. A cutout move of $1.00/cwt on three loads of trade is statistically different from the same move on twenty loads. Reading them together is the difference between a real signal and a print with no follow-through.