Market Updates: January 27, 2017
Center of the Plate
This is the second week that packers have reduced kills by roughly 6% -- bringing cattle slaughter back in line with feedlot supply. Last weeks beef production was very close to where is was in 2016, but overall beef prices were 15% lower. If packers can keep production throttled back to where it was last year, it would be fair to assume that beef prices can begin to recover. So far the only prices which have firmed are for some of the thin meats like flanks and skirts.
Since January began, pork production has slowed as the fall hog run ends. We are now producing just a little more pork than last year and recent data would suggest that, after adjusting for larger pork exports, there may actually be less pork available domestically. Pork prices are 7% higher overall, with bacon now trading above 2016's high!
Wing prices have probably topped out at about 1% higher than last year's Superbowl timeframe. Seasonal demand for boneless wings is also pulling tender prices higher. Jumbo breast and thigh meat are still readily available. Thigh meat prices are still a little high when compared to the value of leg quarters.
Turkey processors have held pricing steady for whole turkeys, but retailers continue to be slow to commit on large buys.
The Block and Barrel markets have been bearish as of late. Speculators feel the upward motion will be limited due to increase of milk production, herd sizes and cheese stocks.
Processed eggs are fully available. Within shell eggs, retail demand from fair to fairly good. Supplies well balanced and held confidently. Market steady to full steady.
Cold storage butter came out earlier in the week and it was positive. The report showed strong growth year over year but more importantly over last month. While this will not send the markets tumbling, it should put butter on a retreat course where we will see decreases over the next few weeks. The next few trading days will give us a good idea of the speed of the market movement.
Grocery & Bakery
Spring wheat futures rallied 10% last month on worldwide tightness of high-protein wheat. Farmers sold the rally, refilling the pipeline with cash wheat. Prices have since eased back a little, but millers are still getting 12% more for pizza flour than they were last year.
Concerns about flooding in Argentina have been allayed by ideal growing conditions in Brazil. Expectations of big supply have caused soybean oil prices to consolidate around the lower third of the USDA $.34 - $0.37/lb forecast range.
Many beet sugar suppliers are well-sold for 2017 and are holding prices firm. Cane sugar is trading in a range. Refiners with domestic supply are selling in the middle of the range; suppliers who rely on imports are at the upper end of pricing.
Full Market Report
For the detailed market report this week, download a printable PDF.