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Pork carcasses hanging in cooler marina_karkalicheva/iStock/Thinkstock

Feedstuffs Meat Price Outlook: June 25, 2019

Cash cattle prices fall to lowest levels this year but still near year-ago levels.

Beef: Cash cattle prices are now down to their lowest levels so far this year, with the bulk of live trade last week at $110/cwt., about the same as a year ago. Dressed trade in the North declined by several dollars to $180-181. The Choice cutout weakened to the $220 area last week, while the Select cutout lost a few dollars toward $201. This resulted in the widest Choice/Select spread so far this year. The chuck and flank primals were steady to firm, while the rest of the primals were showing some weakening, particularly on the ribs and loins. Fed cattle carcass weights rebounded for the week ending June 8 from what was likely the seasonal low the prior week. Beef production was estimated at 522 million lb., down 0.7% from the prior week and 1.2% smaller than a year ago.

Pork: The cutout was not able to find traction last week, making some healthy concessions as hams continued to reset while bellies failed to find seasonal price movements. Several entities in Canada are not able to ship product previously destined for China for the immediate term, with some believing that product is getting put back into the North American supply at this time. Even with the strong supply of animals, it will be difficult to find the groove on seasonal movement for hogs and the cutout for this summer, but any excess supply for the immediate term could allow the peaks of the cutout to be in arrears. The risk on the cutout is still to find a few more dollars in it over the next several weeks, but the bellies will be key if that can happen.

Poultry: Since the beginning of 2019, there has been a strong correlation between the three-week moving average store count of retailers featuring wings at full-service delis and respective wholesale price points. During April and May, private sources were asserting that the U.S. Department of Agriculture’s reporting of market prices was a bit overdone to the upside, and it is likely that the trades reported, which were surveyed in the Northeast markets, were subject to elevated foodservice demand. Nonetheless, the recent rebound again coincides with elevated retail feature activity. The question is whether the current market strength turn wing-centric foodservice outlets to featuring boneless wings again this autumn. IEG anticipates that nearby resistance to elevated pricing, coupled with capacity expansion, will allow for resistance to prices in the $2.15-2.20 range.

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 susan.dahlgren@farmprogress.com for more information.

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