Market Updates for August 20, 2021
Dairy | Eggs
Small - No change
Retail demand mixed. Supplies of extra large and large well balanced and held confidently. Market steady to full steady.
Dairy | Butter
Cream inventories are continuing to tighten as ice cream production starts to compete for raw material and hits it's production stride. Retail sales show signs of decline, but overall are still healthy. With restaurants reopening food service distributors are still coming back to the buying table, but orders are still below expectations.
Dairy | Cheese
The CME Block market responded to the governments release of another billion dollars in the USDA Box program. Speculators feel this will have an effect on the markets for the short term but will not be sustainable for the long term.
Grocery & Bakery | Frying Oil
A neutral USDA WASDE report last week didn't provide a clear direction for the market, leading to a flat trade dominated by weather talks. Rains are forecast over the major soy growing regions which bodes well for yields as we enter the home stretch before the harvest. The next big news will be first reports from the fields.
Grocery & Bakery | Sugar
There was little change to domestic sugar inputs in last week's USDA report. Stocks-to-use were decreased to 13.4% for FY 2022, meaning they are estimating consumption to outpace production. Given the nature of the industry and the propensity to forward sell a majority of the crop, expect spot supplies to remain relatively tight next year - similar to 2021.
Grocery & Bakery | Flour
As mentioned last week, the spring wheat crop is in bad shape and little has changed. Markets have priced the news into current offerings. The harvest will confirm whether or not the surveys are on point. Look for flour prices to remain firm through the harvest.
Meat | Pork
This week's harvest is forecast to be 2.4 million head, on par with last week. 8% fewer hogs are expected to be harvested this week than 2020 at this time.
Bone in butt and boneless butt prices are higher this week , pork butt prices will increase from here into Labor Day as demand for the holiday increases. Boneless loin prices jumped this week based on retail features and needs for Labor Day features. Packers are facing labor shortages and boning less pork.
Spare ribs are higher this week, with St Louis prices steady to higher as buying for Labor Day continues. Back ribs prices are stable to higher.
Belly prices are higher this week, prices could level off in the next week as record prices will likely slow down demand. Few to no shortages are expected.
Meat | Beef
Harvest numbers are slightly higher than previous year's numbers as smaller cattle have dropped the production pounders per head slightly. Choice grading is starting to slip and currently running a bit below previous years’ percentage. Prime has continued to drop percentage-wise making it even more difficult to come by. Expect to see the choice/select spread to increase as we move closer to September. Logistical issues with both container ships and port warehouses have slowed the processing of imports and exports. Late August and into September should show good numbers of exports as ports and warehouses work on catching up on the backlog of orders.
The choice cutout has started to move higher, up $0.50 bouncing off the dip we had in mid-July. Demand is picking up again as prices became more realistic. Most middle meat items have started to trend higher as retail took interest and took positions in late July. Ribeyes are higher, expect to see these prices for the next few weeks with retailers booking for deep chill programs to support the holidays. Striploin and short loins have captured some retail attention and should keep support under these cuts through most of September. Briskets have been booked up by retail on forward bookings to help cover Labor Day ads with a cheap BBQ beef option, prices have shot back up. End cuts are steady to higher, holding well above historical prices for this time of year. Thin meats and labor-intensive items are steady to slightly higher across the category as labor is an issue across all beef packers and specialty cutters. Grinds have started moving already, retail has already stepped in on ground beef packages for the upcoming holiday.