Beef, Poultry & Pork Market Update

Beef:

The CME April cattle contract increased by nearly 3 percent to $209.25 per hundredweight, setting a new record-high price. Most other contracts also saw gains of 2-3 percent. Spot/cash cattle prices finished higher at $204 per hundredweight. The total beef cattle harvest rose by 1.6 percent to 587,000 head, an increase of 9,000 head, but it remains down 1.7 percent compared to last year. Steer carcass weights decreased slightly by 2 pounds to 1,435 pounds but are still 39 pounds heavier than last year. Beef production reached 512 million pounds.

Both choice and select beef cutout values increased last week, with choice up 3 percent to $328.06 per hundredweight and select up 1 percent to $309.36 per hundredweight. Breaking down the choice cutout, the bone-in export rib increased by 5 percent to $9.55 per pound, and the boneless ribeye rose by 8 percent to $12.02 per pound. The loin complex saw gains last week, with choice shortloins up 2 percent to $7.67 per pound and choice striploins also up 2 percent to $9.80 per pound. Choice top sirloins increased by 6 percent to $5.06 per pound, and choice tenderloins rose sharply by 6 percent or $0.81 to $13.21 per pound.

The end cuts, including chucks and rounds, showed mixed results. In the chuck segment, chuck rolls increased by 4 percent to $4.09 per pound, while shoulder clods decreased by 1 percent to $3.36 per pound last week. In the round complex, inside rounds increased by 2 percent to $3.67 per pound, and bottom round flats remained flat at $3.52 per pound.

The ground beef and trim markets saw significant increases. Ground beef 81% rose by 3 percent to $2.72 per pound. Within the trim segment, 50% trim increased by 12 percent to $1.39 per pound, while 90% lean trim saw a slight increase to $3.82 per pound.

Looking ahead, strong live cattle prices and robust beef demand suggest continued increases in cutout and subprimal values, particularly as the spring grilling season approaches. Beef's strong fundamentals and seasonal demand are expected to sustain price strength, even amidst trade-related volatility affecting other proteins like chicken and pork.

Poultry:

The USDA reported a young chicken harvest of 167.4 million head, which was down by 1 percent week-over-week but up 1.7 percent compared to the same week last year. The average bird harvest weight decreased to 6.43 pounds per bird, remaining flat compared to last year. Due to the lower harvest and bird size, overall production fell by 3.3 percent week-over-week to 818 million pounds. Weekly broiler-type placements were flat last week at 191.8 million head, but this is higher by 1.7 percent compared to last year. Hatchability remains well below seasonal averages at 77 percent.

Wholesale chicken prices increased last week, with gains in WOGs, breasts, and boneless thigh meat. The National Composite whole birds and WOGs rose by $0.03 week-over-week to $1.31 per pound. In the foodservice WOGs segment, high volume 2.5 to 3.5-pound WOGs increased by $0.04 week-over-week to $1.29 per pound. The 2.5-pound WOGs rose by $0.02 to $1.44 per pound, while the 3.5-pound WOGs increased by $0.16 to $1.14 per pound.

In the white meat segment, boneless/skinless breasts rose by $0.13 week-over-week to $2.18 per pound, and tenderloins increased by $0.02 to $1.79 per pound. Retail promotions for chicken saw a significant increase of 38 percent week-over-week, with lower advertised prices to attract consumers. Nearly half of all U.S. grocery stores featured chicken breast specials last week. Chicken wings decreased sharply by $0.12 week-over-week to $1.52 per pound, while drumsticks fell to $0.45 per pound. Boneless/skinless thigh meat increased by $0.07 to $1.60 per pound, while bone-in thighs remained flat at $0.83 per pound.

In the turkey segment, boneless breasts increased by 3 percent last week, while bone-in whole turkeys rose by almost 9 percent week-over-week. Shell egg demand has dropped sharply as the absence of significant HPAI outbreaks in recent weeks has allowed supply to recover and wholesale prices to decrease. The USDA's large eggshell index fell by almost 32 percent week-over-week and is now down 38 percent month-over-month.

Looking ahead, retaliatory tariffs by China, Canada, and Mexico could potentially help lower prices for chicken parts in the U.S.

Pork:

CME hog futures and cash lean hogs remained flat last week. The CME April future, now the nearest contract on the board, was at $85.5 per hundredweight, with most other contracts slightly higher. Spot/cash hogs were slightly lower at $89.32 per hundredweight as of Thursday night’s close. The hog harvest increased sharply by 4 percent to 2.51 million head and was up 2 percent compared to last year. Overall pork production reached 543 million pounds. The hog and pork market continues to navigate the effects of retaliatory tariffs imposed by the largest U.S. pork customers in Mexico and China. With the sharp increase in harvest and production, the pork cutout traded down by 1 percent week-over-week to $95.86 per hundredweight.

Breaking down the primals and subprimals, the loin primal increased by 1 percent week-over-week. The price of boneless pork loins decreased by $0.02 to $1.37 per pound, while loin/baby back ribs rose by $0.21 to $2.78 per pound, and tenderloins fell to $1.65 per pound. The pork butt primal rallied higher by 3 percent to $108.60 per hundredweight, with the subprimal bone-in pork up by $0.08 to $1.24 per pound, and boneless pork butt remained flat at $1.37 per pound. Over 6.2 million pounds were sold to international markets, but it remains to be seen if this trend will continue with the tariffs in place.

The rib primal remained flat last week at $146.58 per hundredweight, while medium spareribs decreased by $0.02 to $1.57 per pound. The ham primal finished lower by 3 percent last week at $89.29 per hundredweight. The belly primal fell by 5 percent to $137.44 per hundredweight and is now down 30 percent month-over-month after hitting historic highs in late February. The subprimal derind 13/17 belly decreased by $0.08 to $1.67 per pound. In the trim segment, 42 percent trim fell by $0.09 to $0.74 per pound, while 72 percent trim rose by $0.05 to $1.08 per pound.

Looking ahead, tariffs and retaliatory actions, especially from Mexico, present a considerable risk to the hog and pork cutout market. This lack of clarity is likely to fuel market volatility, and without a strategic response, we can anticipate large price swings, mirroring the recent instability.

Bacon:

THE BELLY MARKETS CONTINUE TO EXPERIENCE VOLATILITY THORUGH THE PRICING WEEK – WITH GENERAL WEAKNESS CONTINUING THE OVERALL DOWNWARD RISK TREND THIS WEEK:

The belly markets continue as forecasted, with ongoing volatility in day-to-day trading… with additional volatility attributed to very light trading volume over the past few weeks noted as a driving factor. This volatility is likely to continue, as is the general weakness over the coming 4-5 weeks – not necessarily driving additional declines but likely to limit upward risk potential over this time. Look for the USDA PRIMAL to continue to trade at a premium to the 5-year average, but unlikely to build momentum up or down more than 10-15 points of the 150 level here in the short to mid-term. The markets averaged near 140 (USDA PRIMAL) / 190 (USDA 9/13 DERIND) this week, up from averages of 150 (USDA PRIMAL) / 200 (USDA 9/13 DERIND) from the week prior.

• The single day HIGHs for the markets this week were 144.72 (USDA PRIMAL) / 213.89 (USDA 9/13 DERIND)
• The single day LOWs for markets this week were 131.92 (USDA PRIMAL) / 166.52 (USDA 9/13 DERIND)

Looking ahead, analysts forecast belly markets to trend mostly flat and with limited upward / downward risk potential over the 5 weeks… currently the general belief is the belly complex will continue to trade within range of 150 (USDA PRIMAL) / 190 (USDA 9/13 DERIND) over the coming couple of months. Look for day-to-day volatility to continue, but with limited week-to-week momentum over this time. Overall, the outlook calls for limited up/down-ward risk from current levels now through late Q2… with increased risk for upward pressure to build in June leading into the summer “BLT” months of summer – where annual HIGHs for the complex are expected in July / August.