Market Update From the West Coast Meatheads
October 31, 2016
After a few days where cutouts pushed moderately higher, today’s market was not as active. While packers are attempting to push prices/cutouts up to stay in touch with advancing cattle markets, some resistance is noted from the buy side. Retail and foodservice demand is about average for the moment, and buyers are looking to stay in relative “hand to mouth” fashion of procurement near term.
What a difference a week can make when it comes to beef markets. Certainly, the past week within the Angus beef market saw an overall firming in attitude and pricing structures.
The arrival of the “holiday” market for ribs has commenced. Fall features of roasts have lent to increased wholesale values of chucks and rounds. Strips, short loins, and peeled tenderloin values posted slight advancements, while the top butt continues to lag the other loin cuts when it comes to spot market value increases.
Lean hogs opened mixed to weaker first part of the week but found support above Thursday’s lows and rallied. December hogs climbed to a one-month high and closed at the highest level since September.
According to Urner Barry Newswires, the holiday transformation kicks off two hugely impactful months in terms of retail grocery sales. Circulars will undoubtedly tap into Thanksgiving promotions in the first week of November and many retail outlets will be promoting minimum in-store spending deals during the month for free holiday turkeys, hams, or other staples.
The past week has brought with it a barrage of offerings on all levels of the chicken market which, for the most part, are struggling to be absorbed. Despite frequent and sharp discounting, or at least expressed willingness to discount should that help stimulate interest, there continues to be ample purchase opportunities should the occasion surface. The final week of the month is rarely a strong one in business terms and this month is no exception.
Offerings of all bone in and boneless dark meat lines, boneless breasts, tenders and breast fronts are slow to clear and trending rapidly lower. Wings are benefitting from seasonal requirements but aren’t displaying anything other than a well-maintained status. Looking ahead into November, the current ads which are dominated by beef and pork will make room for turkey in the coming weeks and chicken is not expected to have much presence.
With production advancing and exports consistently inconsistent at steady values, there isn’t a lot on the horizon for chicken processors to get excited about while buyers sit back and watch everything unfold.