Beef, Poultry & Pork Market Update

Beef:

The CME June live cattle futures finished higher by almost 2% last week with June live cattle at $185.65/cwt. The choice beef cutout was up 1% w/w with gains coming on the strength of a 6% increase in the retail feature rate. All loin meat, but particularly the top sirloin and shortloin, saw sharp increases for Father’s Day promotions. Breaking out the choice cutout, the bone-in exports were up 2% and the boneless ribeye gained nearly 4% w/w. The loin complex that has seen gains for the past month or more was up again last week. Boneless striploins, which recently hit new all-time highs, closed up another 2.5% at $11.33/lb. The good news is that packers sold striploins out-front at about a $2.00/lb decrease, so prices should soon drop. The end cuts (chucks and rounds) were mixed, as chuck rolls were up 1% and clods were down 1%. Ground beef 81% was higher by almost 3% at $3.12/lb. However some out-front sales were noted at the $2.75/lb range, so after the July 4th holiday ground beef will decline back under $3.00/lb. Looking ahead, the middle meats (ribs and loins) will trend lower, but the grinds and end cuts will hold firm through the July 4th holiday. The choice cutout has peaked but see live cattle trading a bit higher as the market will start seeing the effects of the tighter cattle supplies.

Poultry:

USDA young chicken harvest was 149 million head, down 2.3% compared to the same week last year’s harvest of 152.7 million head. The National Composite whole birds and WOGs were flat last week. Looking at the parts, gains were noted in the wings and tenderloins. Within the white meat segment, B/S breasts have likely reached their near-term peak and traded lower by 2.8% w/w to $1.78/lb. Chicken tenderloins were higher by 3% w/w to $2.51/lb, which was higher by $.07/lb. Chicken wings were up again last week by 1.4% to $2.45/lb, but drumsticks were down by 2% to $0.44/lb. Thigh meat was flat to a bit higher as B/I thighs were up 1% to $1.01/lb, and boneless thigh meat was flat at $1.85/lb but still higher by 34% y/y. The USDA’s national composite large shell egg index advanced another 19.1% w/w and has now climbed more than 48% over the past two weeks. News around the HPAI-related egg layer culls has supported the gains the past few weeks. Looking ahead, after weeks of increased beef promotions around Father’s Day, chicken is expected to gain more support from the retail and grocery segments. It will remain a staple as shoppers look for the best protein options for their budgets.

Pork:

The lean hog futures were all flat to slightly lower last week. The overall pork cutout finished lower by 1% at $97.02/cwt but is still up 11% this year. Retail promotions were just slightly higher by 1% last week, with backribs seeing the largest increase in promotional activity. Breaking out the primals and subprimals, most were lower on the week with only 72% trim up, while the loin and belly primal were flat. The pork butt primal was 1.7% lower w/w, and the subprimal B/I pork butt traded down $0.03 to $1.42/lb. Pork butt promotions saw a large increase w/w in the retail markets, but retail pricing was higher by 29% compared to last year. The belly primal shot up early in the week but came back down and finished flat. The derind 13/17 belly traded lower by $.10 to $1.45/lb. The picnic and pork trim were mixed. The picnics were flat, while 72% trim was higher by 1% w/w. The 42% trim was down by 14% last week to $.53/lb because of the large increase in total harvest. Looking ahead, pork demand was lighter last week because of Father’s Day, and with the increase in harvest and pork production, the market declined. Harvest should slow heading into July, but with freezer purchases complete, the market looks sideways at these levels.

Bacon:

THE BELLY MARKETS EXPERIENCED DOWNWARD PRESSURE WITH CONTINUED VOLATILITY THIS WEEK:

The markets found continued volatility on mostly performed on trend this week, with some addition weakness / downward pressure pressing values for the complex below expectations for the 5-day average. While the market typically finds strength weekly through June and July, this year the forecast has called for June to find limited strength if any, with most of the seasonal strength to show up in July and early August. Look for continued “chop” / volatility for another week or two, with increasing strength following the July 4^th holiday. The seasonal HIGH is anticipated to fall in between the 5-year average and the high from last year (2023)… and is forecasted for the 2^nd week of August. On the average, the market experience moderate downward movement this week with the markets performing near the 120 (USDA PRIMAL) / 160 (USDA 9/13 DERIND) … down from 125 (USDA PRIMAL / 170 (USDA 9/13 DERIND) last week. Look for the market to continue the recent trend of volatility and limited strength for another week (or two), with strength developing in early July and sustaining through early August… with the HIGH forecasted at values near the 190 (USDA PRIMAL) / 240 (USDA 9/13 DERIND) level – with risk to this forecast for the market to perform below these level rather than higher.