Beef, Poultry & Pork Market Update

2/23/24

Highlights

Beef:

It was another quiet week in the beef market; however, signs are developing indicating that the market is set up to move higher in March. The choice cutout was flat w/w, but the select cutout moved higher by 1% last week. Breaking out the primals and subprimals, the end cuts were mixed. Chuck rolls were down 7.2% to $4.02/lb but were sold out-front last week at $4.21/lb, meaning this could be a near-term bottom. Inside rounds were the complete opposite, as they were higher by 3% w/w at $3.15/lb, but were sold out-front at $2.90/lb, meaning this might limit any upside to the weekly prices. Briskets did not trade out-front but sold 1.5 million pounds (or 38 loads) on just Thursday, which seems to position the brisket to move higher in the next month. We also saw some interesting trading in the tenderloin as weekly and out-front sales seems strong. Over 500,000 pounds of choice and 600,000 pounds of select tenders traded out-front last week at the $14.00/lb range. Not only is this supportive of the current weekly pricing, but it will also boost the B/I shortloin by reducing its availability. Looking ahead, the decreased harvest total coupled with lighter weight cattle entering the market contributes to beef packers maintaining a more constrained inventory position. This lends support to weekly pricing.

Poultry:

Last week, the USDA young chicken harvest was flat vs. the prior week at 166.7 million head, which was up 1.5% vs. the same week last year. The individual bird harvest weight decreased to 6.45#/bird, which was lower vs. last week, but slightly larger than last year when they weighed 6.40#/bird. This led to a slight decrease in overall production compared to the prior week but was 2.3% higher y/y. Chicken promotions in the retail/grocery segment were slightly higher as well, with most of the increases coming from wings and thigh meat. The National Composite whole birds and WOGs were flat last week. Looking at the parts, prices are higher for wings, tenderloins, and thigh meat, while breasts were steady. In the white meats, tenderloins gained almost 4% to $1.52/lb, and B/S breasts were flat at $1.21/lb. Wings continued higher again up another 3% w/w to $1.86/lb and are now higher by 11% m/m. However, drumsticks saw a sharp decline of almost 11% w/w. Boneless skinless thigh meat was up almost 4% w/w to $1.17/lb. The large shell egg index surged again for the third week in a row up almost 24% last week, and it is now higher by 37% m/m. Liquid egg whites were also higher by 6% w/w. Looking ahead, the chicken market should remain at the forefront of retail promotions through the end of the month. As always, a significant factor influencing market performance is the level of harvest and production.

Pork:

Last week, the lean hog futures market was much higher across all contracts by anywhere from 3-5%. The pork cutout rose just over 2% to $89.95/cwt last week, helped by the cash hog market and an increase in retail promotions w/w. Both pork butts and spareribs saw a sharp increase in grocery advertisements that was evident by their price moves higher. Breaking out the primals and subprimals, most posted a late-week rally and finished higher for the week with strength in hams, butts, ribs, and bellies. Pork trim was a lot lower again but rallied late in the week to cut some of the losses. The rib was up another 2.5% as the subprimal sparerib continued higher, up 10% in the past two weeks. The butt primal was up another 3.5% to $105/cwt. The subprimal B/I butt continued surging higher after our report earlier last week to close at $1.17/lb or another $.04/lb since the daily report. The ham primal moved higher for the third week in a row and was up almost 7% w/w at $78.53/cwt. The loin primal moved higher late last week to end flat w/w at $86.54/cwt. Bellies finished up 6% and picnics finished flat w/w. Pork trim was lower but traded higher later in the week. 72’s trim was down almost 3% and 42’s were lower by 10% last week. Looking ahead next week, the cutout is expected to rise again slightly, but it’s contingent upon the harvest levels, which are expected to be lower in February.

Bacon:

MARKETS FIND RETURNING VOLATILITY AND STRENGTH AMID UNEVEN TRADING THIS WEEK:

The markets – both the USDA PRIMAL and the USDA 9/13 DERIND – found volatility and upward risk / pressure this week, as trading volume and buyer interest appeared to vary day-to-day across the 5-day average. Overall, the markets averaged near the 135 (USDA PRIMAL) / 170 (USDA 9/13 DERIND) level – demonstrating more volatility and market uncertainty than was anticipated for the week. This week’s strength is not currently anticipated to hold… as indicated by the final market close for the pricing week, returning weakness back toward the 125 (USDA PRIMAL) / 160 (USDA 9/13 DERIND) range is likely heading into next week. The forward outlook continues to call for markets to work back toward the 5-year average, and continue to trend near this trendline (+/-) over the coming 6-8 weeks… considering this, look for markets to potentially come back down in the coming week(s), and then to find a more steady / mild strengthening trend over the coming weeks / months, with occasional volatility and increasing strength by mid-Q2.

Chicken

WOGS and Drumsticks down. B/S Breasts, BI Thighs B/I Breasts Boneless Thigh, Leg ¼’s, Jumbo Wings, and Tenders up.

Pork

Bellies, Lean trim, and Fat trim down. Tenderloins, Back Ribs, Loins, Cushion, Spareribs, Hams, Butts, and Picnic up.

Beef subprimals USDA Choice for delivery week of 2/26/24

Loins

Tenderloins and Top Sirloins down. Striploins up.

Chucks & Rounds

Shoulder Tenders, Top Rounds and Shoulder Clod Heart up. Bottom Round Flats and Chuck Roll down.

Thin Meats

Outside Skirt and Briskets down. Tri Tips, Flap Meat, and Ball Tips up. Flank steak steady.

Ribs

Up.

Ground Beef

Mixed.