Market Update From the West Coast Meatheads

November 19, 2016

Beef

The value of the Choice cutout edged lower this week. Discounts for end cuts and ground beef overpowered the gains seen with ribs and tenderloins.

Buyers remained resolute to book product for the holiday season. End cuts needed discounts as trading interest eased given the lack of space at retail cases because of turkeys marketed for Thanksgiving.

Ribs

Rib values continued the seasonal move higher. Choice rib cutout value gained 3.40%, or $11.28/cwt.

Loins

Peeled tenderloins remain the shining star for the loin primal, given holiday interest. Strips and short loins continue to struggle to find improved demand and value.

Angus

Angus beef markets at present appear centered on holiday features of ribs and tenderloins, where prices continue to advance. Sustained strong production recently, given the continued profitable packer margins, has lent to ample inventory levels of chucks, rounds, thin meats and grinds. End cuts over most of the past week were trading at steady to lower levels as packers were attempting to clear inventory.

This week’s cattle market put somewhat of a halt to the discounting as cash trade moved sharply higher and packers started to price spot offerings higher. Turkeys and hefty supplies of pork and chicken continue to keep a lid on demand for beef including Angus product.

Pork

Boneless and bone-in hams remained well supported on limited offerings and consistent seasonal interest. Bellies trended lower this week with supplies gradually expanding.

Trimmings were quietly steady on the day. The market for fresh pork products was led lower Thursday, especially in the loin and butt categories, the result of the significant rate of production and buyers failing to maintain routine business. In turn, sellers have had to go into the open market with unexpected quantities and were discounted accordingly.

Chicken

With less than a week until Thanksgiving, chicken has taken a backseat to the more traditional holiday meals such as whole body turkeys, bone-in turkey breasts and hams. In the retail sector, weekly circulars feature increased amounts of turkey and pork, but also a steady flow of beef and seafood. Chicken offerings are down significantly from previous weeks.

With that said, most items in the complex are holding the line. Whole birds and WOGs are no longer trending any higher in value as supplies are more adequate to cover needs. Prices are supportive of our listed quotations. Breasts and fronts are rated as steady to full steady. Offerings are limited and held for full market values. This has tightened the availability of wings, particularly the smaller sizes. Breast meat and tenders are fair at best. In the dark meat complex, we’re beginning to pick up reports that suggest a soft undertone is looming. Thigh meat and leg meat are under pressure and have adjusted lower. All bone-in items are about steady.

Note: Because of the brief Thanksgiving trading week, Market Report will not publish Friday, November 25. Our next report will appear Friday, Dec. 2.
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