Beef: Over the past few weeks, many comments have been made regarding the formation of a "two-tiered" cash market, and, using Kansas negotiated cattle sales as an example, four of the past six weeks have shown a bimodal price distribution where two peaks make up at least 30% of total sales. In each of these four weeks, price peaks have been separated mostly by $2 from peak to peak. Throughout the six-week period, 15- to 30-day sales (as a percentage of total sales) have escalated sharply, moving from the low 20% area in early April to near 48% in the latest report released on May 21. The Kansas negotiated cash price during the week of May 18 was $115.07/cwt., but 17% of deals were done from $112 to $114, while 46% of sales were made from $114 to $116, and the remaining 37% changed hands from $116 to $119. Presumably, the true market lies in the $115-119 range, which, if calculated from that range, puts the weighted average at $116.61, with packers securing out-front inventories for delivery into early June at a weighted average of $113.59.

Pork: Cold storage rotations, if utilized effectively, can be a tool to mitigate price risk and ensure that product supplies remain constant. This year, like others, the industry is relying on cold storage programs, for the most part keeping with traditional behavior. Total levels in cold storage are 641 million lb., 7.8% higher than last April by 47 million lb. This is by no means a record but is a healthy increase from last year, averaging roughly 9% higher than 2017 so far in 2018. What's interesting to note, however, is how the industry is specifically utilizing cold storage rotations this year versus last year. Going into last year, the industry saw record levels of fresh supply and did not prepare according to tradition. The thought was that fresh supply would be more than adequate, with the biggest deficit last year being bellies and trimmings in storage.

Poultry: In the U.S. Department of Agriculture’s recent “Chicken & Eggs” reports, the relationship of broiler chick production compared with broiler-type hatching egg layer availability has continued on a suboptimal path. In the most recent report, the broiler-type hatching egg layer flock was reported at 59.15 million head during April -- an all-time-record. The April total was up 1.2% from the previous month’s total and 4.3% larger than the same month a year earlier. The strong gain in layers has dual implications. First, it is expected that additional layers are needed to supplement an aging flock that is producing fewer eggs. Second, additional capacity is expected in upcoming months as preparations are made for expending processing capacity. In addition to April layer estimates, a total of 802.8 million chicks were hatched during April, which was record high for the month. Broiler chicks hatched per layer during April totaled just 13.58 head, the lowest April total since 2003.

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.