Week of July 11, 2026

This Week

• The Choice/Select spread compressed to 14.35 cents; grade premium is disappearing faster than supply is tightening.
• Strip loin and ground 81% called firm last month; both are running badly wrong and deserve a plain accounting.
• Pork bellies are the one call working cleanly; the setup is now 13% onside with room left.

Supply Picture

Net beef tonnage is contracting again, but heavier carcasses are doing more of the carrying than the head count suggests.

Beef production is running more than six percent below last year on a kill of 535,700 head that ran 4.5% light. The divergence between those two percentages matters: steers are averaging 54 pounds above last year and heifers 76 pounds above. The tonnage shortfall is real, but the per-head weight cushion is absorbing part of the head count gap. What is not cushioned is the forward pipeline: lagged placements are running nearly double digits below year ago, a number that has only gotten more negative in recent weeks. Less beef on the floor now and less scheduled to arrive.

Cash cattle gave back 1.6% to close the week near 255.68 per hundredweight while the cutout is also drifting lower, which keeps packers pinned in a loss band that exceeds $150 per head even on the most favorable cost assumption. Quality grading at the rail held at 86.6% Choice or better, up 3.1 points year over year, with 32.0% of traded loads moving Choice on the spot, a 2-point gain week over week as buyers concentrated purchases on graded product.

Demand Situation

The Choice/Select spread has compressed sharply and the middle meats are a mixed picture, with the rib complex the one firm outlier.

Two open calls from prior weeks need owning before anything else. Strip loin called firm in late June is down 11.5% since that entry, and ground 81% called firm the same week is down 4.2% with the grade window now closed. Both were wrong. The mechanism that was supposed to support them, a compressing kill propping wholesale, has not transmitted: the cutout is sitting at a level that represents no recovery from last week's close, and the Choice/Select spread has narrowed to less than half the premium the market carried three weeks ago. The grade premium is gone because buyers are not pulling Choice quality aggressively enough to maintain it, and the post-holiday tape has not recovered.

The middle meats divide cleanly into one buy and four holds or fades. Ribeye is the open call still showing positive momentum over four weeks, running well ahead of its recent pace, though it is 9% offside on the current period and the call remains open with 8 days left; that setup will resolve on its own. Strip loin is sitting at negative 1% versus its seasonal norm at 913.90, no longer expensive, but negative four week momentum gives no engine for a quick turn. Without a supporting flag, strip is a wait rather than a step-in. Tenderloin is drifting at negative 0.3% momentum and 10% above seasonal, offering nothing to press. Short loin at 14% above norm with negative 1.2% momentum is rich and fading quietly. Top butt, the open soft call from last week, is on track: positive 2.0% four week momentum after the bounce does not change the posture because it is still 15% above its seasonal norm with no feature support behind it.

Chuck flap remains the loudest warning on the board: 36% above norm with negative 2.4% momentum, a premium with no visible demand support left under it. Inside skirt at negative 6.7% momentum is shedding value faster than any other middle-adjacent cut and confirms the rotation out of premium plate and specialty is continuing. Retail attention on beef middles has pulled back meaningfully from year-ago levels, consistent with the holiday feature cycle normalizing and with buyers not stepping back in aggressively.

Trim And Grind

Grind momentum has stalled and the EXPENSIVE flags are now stacked across the lean complex; the supply argument still holds but the price is no longer cheap.

The ground 81% firm call from June 28 closes out wrong, down 4.2% over its window. The supply mechanic was correct: a compressing kill does pull lean off the floor. What the call missed is that the price was already deeply above seasonal norms when the call was made, and the EXPENSIVE flag has been active throughout. Ground 81% is running more than a third above its seasonal norm with only marginal positive four week momentum. The supply floor is real but the price point has been set by a year of tight lean, not by a fresh demand surge. Buyers who need coverage should stay covered; buyers looking to add are buying well above historical value with negative engine support.

The 50CL trim is the one soft edge, giving back ground over four weeks as the cheapest lean meets resistance at current levels. The 65CL holds its best momentum reading in the complex and remains the most defensible lean position, but it too carries an EXPENSIVE flag at 24% above seasonal.

Pork Market

Bellies are the one call working; up 13.2% since last week's entry with the setup still intact.

The belly call from July 5 is the cleanest position on the board right now, up 13.2% onside. The mechanic is holding: bellies at 173.79 remain well below their seasonal norm with four week momentum that has accelerated meaningfully, and pork packers near breakeven at a -$2 to +$6 per head implied range have no incentive to cut production. Pork loin at 101.07 is down 0.3% since last week's hold call, on track; loins sit below their seasonal norm by double digits and the modest 3.5% four week momentum is not enough to overpay from here. Butts are on track as the soft call, down 6.8% since entry, continuing to shed last spring's foodservice premium. Retail feature dollars within pork are quietly rotating toward loin cuts even as primal values drift, a counter-signal worth noting but not enough to reverse the posture.

The export book is the quiet support under this complex: pork volume is running 5% ahead of last year even with China effectively tariffed out of the market. The two soft spots are Mexico, where the PRV suspension has variety meat shipments down roughly 80%, and Japan, off double digits. The Mexico piece matters most because variety meat value feeds the carcass math that is keeping pork packers near breakeven.

Chicken Market

Tenders are in freefall and retail chicken ground is surging; white meat is absorbing promotional attention that would otherwise compete with beef middles.

Boneless skinless breast has fallen 9.7% over four weeks to 125.24 cents per pound, now sitting at one of the deepest seasonal discounts in the complex, and tenders at 131.62 are running nearly half their typical seasonal value, the widest discount of any cut on the board across all proteins. Wings are the counter-signal: up strongly over four weeks to 107.47, still well below seasonal but now recovering, which suggests the deep discount on wings has started drawing buyers back. The net read is that white meat cheapness is holding retail feature attention on poultry and keeping ad budget away from beef middles; that demand flow is consistent with the Choice/Select spread compression in beef this week.

Market Risk

US screwworm detections are now confirmed in three Texas counties and one New Mexico county; the forward placement pipeline is where the damage compounds.

Confirmed cases in Zavala, La Salle, and Gillespie counties have triggered active 20-kilometer quarantine zones around each site, and the southern border import suspension has now persisted well past a year and a half with no resumption scheduled. That closure is why the lagged placement figure is running ten percent below the prior year and why cattle-on-feed is down two percent year over year. This week's policy news adds a new wrinkle: independent cattle producers are pressing USTR to apply Section 301 tariffs to Brazilian beef, a signal that the industry is trying to manage the feeder gap through trade policy rather than waiting on the sterile fly program. If Brazilian beef faces additional trade friction at the same moment feeder supply is already constrained, the 2027 fed kill outlook tightens further than current forward curves reflect. The Metapa SIT facility coming online in Mexico this summer is the one piece of the supply solution that could relieve pressure; any delay extends the quarantine posture.

The export book is not riding to the rescue either. USMEF's January through May tally has beef export volume down 10%, and the hole is almost entirely China: strip that market out and volume is off less than one percent with value actually up. For a market where the grade spread says domestic demand is the binding constraint, the export bid that might have absorbed the slack is a China-sized hole.

Retail Demand Flow

Chicken is winning the feature page and ground beef is holding beef's position; the holiday beef loin surge has completely reversed.

Post-holiday normalization is visible in every column. Beef stores fell by more than fourteen hundred week over week to 139,908, with loin dropping sharply after last week's July 4 surge. The holiday commitment in loin and rib was exactly that: a calendar feature that cleared and handed the page back to ground beef, which added 3,530 stores. Chuck picked up 7,471 stores, a meaningful gain that tells you retailers are rotating budget toward the affordable end of the beef case as middles step back. Beef middle ad share is now more than two points below year-ago levels, a sustained retreat that frames the demand environment for wholesale middles accurately.

Chicken expanded its footprint meaningfully to reach 192,276 stores, the largest active protein on the retail feature page by a wide margin. Ground chicken specifically jumped 12,826 stores, the largest single-cut move on the page. It is not a clean cheap-input story: breast is deeply below seasonal but leg quarters are running above their norm, so the driver is not visible in the data. The shelf commitment is. Pork pulled back 18,835 stores as the processed holiday programs unwound, but within pork the middle ad share gained more than four points on loin feature builds, a divergence that says promo dollars inside the category are rotating toward value cuts rather than retreating uniformly.

The Call

Supply is tightening hard but the cutout is not cooperating; posture is defensive until the spread rebuilds or the forward pipeline forces the issue.

The grade spread collapsing to its narrowest level in weeks is the most important signal in this issue. A tightening kill that cannot hold a grade premium tells you demand is the binding constraint right now, not tonnage. Buyers who need coverage on the lean side stay covered because the forward feeder pipeline argument has not changed. On the middle meat side, the risk of chasing a rally that the data does not yet support is higher than the risk of waiting. The one position worth holding without a flag is the pork belly, where momentum and seasonal posture align and the call is already working. The single thing that flips the defensive posture is a cutout recovery on the coming week's tape: if the grade spread begins to rebuild from its current compressed level, it signals that grade demand is reviving and the supply argument reasserts itself.

Watch This Week

• This week's boxed beef tape: does the Choice/Select spread begin to rebuild from 14.35 cents.
• TAHC zone updates: any case outside the current three-county Texas corridor changes the placement narrative.
• USTR response to Section 301 tariff petition on Brazilian beef: a policy move here shifts the 2027 supply math.