Market Update From the West Coast Meatheads
April 15, 2017
Beef cutouts declined in large fashion this week, as beef processors needed to move product which resulted in discounted wholesale values. Loins and rounds remained the two problematic primal sections of the carcass.
The good news for the packer is the reward of an improved spot inventory position as the week came to a close, as well as decent interest in buying for forward delivery came to fruition.
The Easter/Passover week is typically a slow one and this year was no different. Negotiations in the beef market were slow to take off. As the week progressed, however, there seemed to be support as cattle prices moved higher and retailers were faced with the realization that Memorial Day is right around the corner this year. This supported a mostly steady market. Ground beef was the clear winner of the nicer weather for pulls so we saw replenishing early and additional support late from grinders on the end cuts. The major winners this week were Teres Major and Outside Skirts.
The market moved from oversupplied to balanced this week, but most averages on Friday remain below week ago levels. Buyers remained cautious, and spot loads were subjected to discounting due to this buyer behavior in advance of Easter week.
Especially weak were loin products, where the composite fell another three percent. Butts proved to be steadier, buoyed by a renewed buying interest. Picnics and cushion products were also lower week-over-week, and so were spareribs.
St. Louis Rib and Loin Back Rib values ranged steady/weak.
Most listed lines are very well supported. Bird weights continue to trend lower which has helped tightened the supply. Demand is moderate to active for several items and even brisk for a few. Whole breasts and fronts continue to receive a good call and prices are trending higher. Breast meat is rated as steady and trading at supported levels. Tenders and wings remain snug. Foodservice demand is active and absorbing most of what’s being made available. Chunk and trim meat are moving with ease. The same can be said for thigh meat and even leg meat. All bone-in dark meat items are balanced. Whole birds and WOGs are still testing lower in spots.