Beef, Poultry & Pork Market Update

Beef:

The CME April cattle contract increased by 4 percent, reaching $209.90 per hundredweight (cwt). Other futures contracts also saw gains of 3-4 percent. Spot/cash cattle prices rose to $208/cwt as of Thursday night. According to the chart, total beef cattle harvest decreased sharply by 4.6 percent to 564,000 head, a week-over-week decline of 27,000 head, and a 5.7 percent drop compared to last year. Steer carcass weights increased by 1 pound to 1,431 pounds, which is 32 pounds heavier than last year. Beef production fell to 491 million pounds from 513 million pounds the previous week.

The choice and select beef cutout showed mixed results last week. The choice cutout decreased by 1 percent to $332.90/cwt, while the select cutout increased by 1 percent to $316.39/cwt. Within the choice cutout, the bone-in export rib dropped by 4 percent to $11.23 per pound, and the boneless ribeye fell by 1 percent to $13.38 per pound. The loin complex had mixed results: choice shortloins rose by 1 percent to $8.45 per pound, choice striploins decreased by 2 percent to $10.61 per pound, choice top sirloins increased by 2 percent to $5.69 per pound, and choice tenderloins fell by 1 percent to $14.28 per pound.

End cuts, including chucks and rounds, were lower across the segments. In the chuck segment, chuck rolls decreased by 5 percent to $3.59 per pound, and shoulder clods fell by 6 percent to $2.98 per pound last week. In the round complex, inside rounds increased by 1 percent to $3.54 per pound, while bottom round flats decreased by 2 percent to $3.19 per pound. The ground beef and trim markets were mixed. Ground beef 81% dropped by 9 percent to $2.74 per pound. Within the trim segment, 50% trim rose by 4 percent to $1.23 per pound, while 90% lean trim decreased to $3.74 per pound.

Looking ahead, despite the cutout taking a brief pause last week (which is typical for a holiday week), the outlook is positive. Cattle prices are rebounding from the earlier dip this month, and with fewer cattle going to harvest, tighter beef supplies and higher prices are expected in the coming weeks.

Poultry:

The USDA reported that the young chicken harvest reached 167.9 million head, marking a 1 percent increase week-over-week (w/w) and a 4.4 percent rise compared to the same week last year. The average weight per bird remained steady at 6.51 pounds w/w but was higher than last year's 6.45 pounds. This slight increase in harvest led to a 1.5 percent w/w rise in overall production, totaling 830 million pounds.

Weekly broiler-type placements decreased to 191.1 million head last week, though this figure is 2.1 percent higher than last year and above historical averages. Hatchability improved by 0.3 percent w/w but remains below seasonal averages at 76.9 percent.

Wholesale chicken prices increased last week, with the most significant gains seen in breasts and boneless thigh meat. The National Composite whole birds and WOGs (without giblets) rose by $0.01 w/w to $1.36 per pound. In the foodservice sector, high-volume 2.5# to 3.5# WOGs increased by $0.02 w/w to $1.35 per pound. The 2.5dn category remained flat at $1.46 per pound, while the 3.5up category increased by $0.01 to $1.23 per pound.

In the white meat segment, boneless/skinless breasts rose by $0.13 w/w to $2.65 per pound, and tenderloins increased by $0.10 to $1.99 per pound. Year-over-year (y/y), breasts are up 57 percent, while tenderloins are down 3 percent. Chicken wings remained flat w/w at $1.42 per pound, and drumsticks increased by $0.01 to $0.46 per pound. Boneless/skinless thigh meat rose by $0.13 to $1.94 per pound, and bone-in thighs increased by $0.02 to $0.84 per pound.

In the turkey segment, boneless breasts increased by 1 percent last week, while bone-in whole turkeys decreased by nearly 6 percent w/w. Shell egg demand peaked last week due to Easter, and higher imports of shell eggs, along with slowing demand, are expected to lead to lower wholesale prices in the coming months. The USDA's large eggshell index decreased by 2 percent w/w but remains up 48 percent y/y.

Looking ahead, the white meat segment is projected to grow, driven by increased demand in both retail and foodservice sectors. In contrast, the outlook for dark meat is uncertain, primarily due to potential U.S. tariffs and the anticipated response from China.

Pork:

Last week, CME hog futures and cash lean hogs showed mixed results. The CME MAR future, which is the nearest contract on the board, increased by 4.5 percent to $90.65 per hundredweight (cwt), while all other contract months rose by 5-6 percent. Spot/cash hogs, however, decreased by 3 percent to $85.37/cwt as of Thursday night’s close.

The hog harvest remained flat at 2.49 million head, resulting in overall pork production of 540 million pounds. The hog and pork markets continue to be affected by retaliatory tariffs from major U.S. pork customers in Mexico and China. Despite the flat harvest and production, the pork cutout slightly increased to $92.78/cwt as of Thursday’s close.

Breaking down the primals and subprimals, the loin primal decreased by 4 percent week-over-week (w/w). The price of boneless pork loins fell by $0.07 to $1.32 per pound, while loin/baby back ribs increased by $0.06 to $2.88 per pound, and tenderloins dropped by $0.09 to $1.52 per pound. The pork butt primal decreased by 4 percent to $106.48/cwt, with the subprimal bone-in pork lower by $0.04 to $1.19 per pound, but the boneless pork butt remained flat at $1.36 per pound.

Export sales declined to 4 million pounds, which is 1.4 million pounds less than the previous week. The rib primal remained flat at $147.13/cwt, and medium spareribs increased slightly by $0.01 to $1.59 per pound. The ham primal rose by 4 percent last week to $83.77/cwt. The belly primal increased by 7 percent to $134.99/cwt, with the subprimal derind 13/17 belly up by $0.10 to $1.63 per pound.

The trim segment showed mixed results: 42% trim increased by $0.03 to $0.76 per pound, while 72% trim decreased by $0.07 to $1.00 per pound.

Looking ahead, future tariffs and retaliatory measures pose significant risks to the hog and pork cutout markets. Nearly 30 percent of total U.S. pork production is sold internationally, and any retaliatory actions could lead to market volatility, potentially resulting in lower prices for U.S. consumers.

Bacon:

THE BELLY MARKET CONTINUED WITH MIXED TRADING, WITH MILD WEAKNESS IN THE USDA PRIMAL AND MORE SIGNIFICANT WEAKNESS IN THE 9/13 DERIND BELLY THIS WEEK:

The belly markets found weakness this week, with continued volatility to trading volume and values across the complex. The USDA PRIMAL market found marginal to mild weakness, while the USDA 9/13 DERIND belly experienced more significant downward pressures. This week the markets averaged 130 (USDA PRIMAL) / 165 (USDA 9/13 DERIND) – down from 130 (USDA PRIMAL) / 180 (USDA 9/13 DERIND) last week. The markets are continuing to perform below forecast for the period, with mild to moderate upward pressure anticipated in the coming weeks as the industry anticipates a steady push back toward the 150 range… and the USDA 9/13 DERIND is likely to trade with upward risk back to 190 over the coming 4-6 weeks.