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Assortment of raw beef and pork pieces on wooden table

FEEDSTUFFS MEAT PRICE OUTLOOK: May 23, 2017

Larger-weight birds may slow progression of breast meat wholesale values.

Beef: Slowing beef movement and more moderate production plans, along with a strong basis, weighed on cattle prices last week, as they slipped to $134/cwt., off about $4 from the prior week. Despite slowing spot sales, still-strong interest in the middle meats and limited supplies of fat trim sustained cutout values, although the blended cutout slipped under $241/cwt. by the week’s end, off about $2 from the prior week’s close. The surge in beef prices is rationing buyer interest, with both spot sales and out-front commitments eroding sharply. The sharply higher spot prices and widening premiums to competing pork and chicken items may take a toll on summer merchandising plans, further exacerbating the risk of significant post-holiday beef price weakness. The sluggish beef movement and weaker undertone in the cutout values, along with still-tight front-end supplies of market-ready cattle, contributed to more limited production schedules: This week’s slaughter slipped to 602,000 head, well below the 630,000 registered in late April and only slightly more than last year.

Pork: The pork cutout moved sharply higher at the beginning of last week, driven by bellies, butts and loins. However, it lost momentum as the week progressed. This was expected, as it was the last probable week for significant purchasing going into Memorial Day, when retailers want confidence in supplies. The price tempering at the end of the week was not a major downturn but simply a softening of price due to purchasing strength being over in the near term. The cutout is not expected to retrace much, if at all, save for some choppy, sideways action this week before trending higher through the summer. There is still going to be excellent product demand for most primals.

Poultry: The lower bird weights recently published in the U.S. Department of Agriculture’s weekly slaughter reports from the Agricultural Marketing Service (AMS) are a buck in the trend of year-over-year improvements to broiler efficiency leading to higher bird weights. Presumably a response to improving breast meat markets, bird weights in the weekly slaughter reports have again shown inconsistencies with expectations. In the most recent week’s data, bird weights reached an average of 6.16 lb., down slightly from the average a year ago but a substantial increase from the last eight weeks, which averaged 6.09 lb. and, at times, reached a low of 6.07 lb. With the summer grilling months upon us and the incentive again coming from breast meat, bird weights may reach the 6.13-6.18 lb. range over the next six to eight weeks. The additional larger-weight birds coming through the system should slow the progression of breast meat wholesale values.

For a more detailed look at the weekly forecasts for the various meat sectors and meat cuts, subscribe to the "Meat Price Outlook." Contact Susan Dahlgren at [email protected] for more information.

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