Market Updates for August 26, 2022
Dairy | Eggs
Large - Up
Medium - Up
Small - Up
Retail Demand Fair to Fairly Good Supplies Well-Balanced and Held Confidently Market Steady to Full Steady
Dairy | Butter
Butter inventories remain tight and producers are saying that labor shortages are causing production runs lower than normal, and many think these labor issues are the new normal; retail consumption seems to be slowing a bit due to high prices, but demand remains seasonably steady for those using for production like ice cream.
Dairy | Cheese
Barrel - Down
Block - Down
The current fundamentals don’t represent the current downturn in the Block Market. The microeconomics are providing pressure on the downside. Food service hesitation has also been influencing the markets. Current cheddar production has been light providing a supply element to restrict how low the market will move.
Grocery & Bakery | Frying Oil
With a few weeks left to the growing season, the early estimates are indicating a good crop in North America. Canada appears to have rebounded nicely after suffering major losses to drought last year. If farmers were to get into the fields and find yields are not meeting expectation, it would give support to increased prices. Expect potentially volatile trade between now and mid-September as speculators will try to lean into positions based on their biases.
Grocery & Bakery | Sugar
Beet sugar remains unavailable on the spot market today as we await the new crop harvest in early to mid September as harvest will not start earlier due to the late planting and hopes that the crop will deposit more sugar. Crop conditions have been pretty good in the Midwest thus far giving hope for a strong year assuming we do not see an early frost or a very wet fall. Cane sugar is very limited on the spot market as well and pricing will remain elevated as we get into 2023.
Grocery & Bakery | Flour
While winter wheat harvests are somewhat wrapped up now, there is still a bit of a drought affecting the central lower plains. Spring wheat continues to be harvested slowly, only 30% completed to date but with 64% rated good to excellent, it is proving to be worth the wait. While prices have dropped a bit, they remain elevated over last year with little to suggest too large of a decrease looming anytime soon as there is likely more upside risk due to the tight carryover stock currently in place.
Meat | Pork
Meat | Beef
Cattle harvest is running above last year, dry pasture is forcing more cattle to slaughter. The continuation of drought conditions has forced cattle off pasture and onto feedlots. Feedlots are forcing cattle to harvest due to high feed costs. Much anticipated tight cattle supplies in the fourth quarter are still in the forecast with the expectation of up to 5% lower beef production. Many analysts are forecasting a tight cattle supply through possibly 2025. Beef demand has slowed as consumer spending has shifted to other basic necessities.
Boxed beef is starting to show some weakness around seasonal items and a majority of items have softened over the past month as consumer confidence has been low and there's less disposable income circulating. Ribeyes have been forward sold and have remained steady to higher. Strips have now been taken off widespread features at the retail level lowering demand and moving more cases to the push sheets in the past week. Tenderloins seem to be weak as they have been over the past few months. We don't expect to see much action on tenderloin unless we get some strong forward sales into the holiday season. End cuts are getting forward sales currently, suggestive of retail features into September. Round cuts have shown price increases in August for a number of years now, expect higher prices this compared to last. Thin means such as skirt meat are continuing their post-peak down tread into the Fall. Ground beef is in good supply. As harvest stays high there will be excess trim making for more ground beef. Prices for grinds are easing lower but could get a little rebound for Labor Day.