Market Update From the West Coast Meatheads
June 24, 2018
Beef processors chased clearing-level prices for ribs and loins last week, as they faced the lower seasonal trend for middle meats. End cuts were mixed: chucks held near steady while rounds varied with signs of both discounts and gains. Buyers adopted a buy-for-only-immediate-needs mindset. Ground beef values deviated slightly but remain undervalued compared to same time period one year ago.
Discounted ribs, loins, some rounds, thin meats and ground beef pulled the value of the Angus carcass cutout lower. Seasonal demand eased while grading strengthened, applying negative pressure on the complex.
Chucks were mixed as was the round complex. Inside rounds were problematic for the beef processor, while the bottom round/flat found support from ground beef processors.
Cutbacks in the harvest resulted in softer hog prices, which, when combined with seasonal strength in some pork items, helped bring margins back into the black.
For the second week, while ribs pushed higher, butts and loins struggled to gain the meaningful traction that one would expect shortly before the 4th of July.
Market participants continued to wrestle with premium freight rates along with summertime heat, which spanned across most parts of the U.S. Input on whole birds and WOGS varied with some players taking a more bullish stance than others.
Overall, trade conditions remained unsettled with the bulk of sales volume recorded within a close range of listed quotations. Breast meat was in supply across all sizes. Jumbo product was the most challenged to keep up with a slow and steady pull from regular buying channels. A similar situation was in place for wings.