Market Update From the West Coast Meatheads
November 4, 2016
The wholesale beef market is getting a bump this week as holiday interest in ribs leads the cutout higher. Wholesale rib values historically appreciate from mid- October through early December as needs for holiday rib roasts create increased demand. Buyers have begun securing orders well in advance of the holiday season, taking advantage of rib values that are currently running at a four-year low.
With a price decrease of about 12% from last year at this time, the retail sector is in position to promote rib roasts aggressively this holiday, at more attractive levels than we've seen in years. Beef roasts are currently averaging levels 26% below year ago.
Angus Beef Processors have taken advantage of firmer demand for Angus ribs and tenderloins, which are now taking the lead to move cutouts higher. Not only has seasonal interest improved immensely for holiday-type middle meats, but it has also contributed to higher spot values, resulting in the recent diminishing choice grading percentage that has left spot supplies of Choice-and-Higher-graded product a bit tighter for the current call.
End cuts present a mixed-market scenario. Top butts have not yet found support.
The market is holding basically flat overall for the week but has traded in rather choppy fashion day to day. December hogs closed 82.5 cents lower at $47.00.
Hams were fully steady today as domestic interest and demand from Mexico remained supportive. Bellies closed unchanged. Trimmings were unsettled as offerings varied by location, yet the majority of trade fell within previously established ranges. Loin items remain under pressure and there’s underlying support for butts. The approaching Thanksgiving holiday and larger kill has quieted buyers and resulted in surplus loins and weak trade throughout the component. Meanwhile, butts are finding support from both domestic and foreign buyers. Spareribs traded in-range.
Whole birds and WOGs are rated full steady to firm. Demand is especially active where needs are tied to first-of-the-month retail features. Prices are trending higher. Breast meat and tenders have settled out for the time being. Asked and paid values are within normal range of our listed quotations. Several package deals of frozen breast meat have been booked over the last few weeks, so suppliers have shown less product, which has helped to stabilize the market. Buyers are still cautious in their approach. Breasts and fronts are better, but not great. Wings are well-supported. The back half of the bird continues to take its licks. Almost all bone-in and boneless dark meat items are facing at least some downward pressure. Exports are no better than fair.