Market Update From the West Coast Meatheads
January 27, 2018
Supply had a positive effect on cutouts last week. A large winter storm early week shuttered several major packing plants in the North, resulting in a shortage of scheduled production and fabrication. The effect on the spot market with the reduction was that end cut and thin meat values pushed modestly higher, playing a role in carcass cutout gains. Packers were also holding spot offerings with a bit more confidence, pricing product at higher levels given the storm and the higher cost recently paid for cattle supply. Ribs found support during the past week, as some buyers stepped in for product needed for the earlier than normal Easter holiday. The ability to use new freezer technology has allowed buyers to secure product well in advance. Loin cutouts gained slightly as thin meats from the loin section of the carcass saw positive movement.
A firmer attitude certainly developed from the packer’s perspective towards trading spot product. Higher cash cattle prices, mixed with a reduction in harvest given a winter storm early in the week, prompted packers to hold prices with a bit more confidence. Ribs and end cuts, as well as some thin meats, found higher trading ranges. Demand for Easter rib deliveries surfaced. Ground beef prices edged higher week-over-week, as retail features have realized decent results.
The fresh pork complex was unsettled for the entirety of the week. Offerings varied widely at times by seller and there was little in the way of definitive direction for most cuts.
Buyers became more selective in their needs during the past week as production lines and logistics scheduling return to normal. Movement of WOGs and whole birds has become much more irregular and in most cases has forced sellers to discount current production. Whole breasts and breast fronts were limited in availability. Interest in tenders exceeded supplies and higher bids did not always uncover additional offerings. Unlike tenders, the pursuit of boneless breasts almost always yielded adequate supplies. Wings continued to exhibit seasonal trends with cut wing requirements slowly being satisfied in advance of the big football game. That said, supply shortages continue to be noted at midweek. Legs and leg quarters were steady to full steady. Demand for domestic buyers and top export destinations kept production in line with needs.