Market Update From the West Coast Meatheads
December 31, 2017
The week started quiet as expected given the Monday holiday and associated transportation issues that usually come with this week. Once things started going, it appeared that packers were in even better position on strips, chucks, rounds, and ground beef than they originally thought. This at a time that seasonals and the cold weather threw extra support behind these items. Ribs and tenderloins were still problematic but pace of losses slowed significantly.
Cattle grading continues to follow seasonal trends but at higher than normal levels. Despite this, packers have done a good job of selling into this time period. They have also found support in two short harvest weeks consecutively and a bout of cold weather gripping the country. This has led to advances in many Angus beef items you would associate with this time of year. End cuts have outperformed with peeled knuckles, flats, and goosenecks in the round primal, and clods and chuck tenders in the chuck area. Coarse grinds have bounced off recent lows and have also seen increased interest as retailers prepare for cash strapped consumers. Ribs and tenderloins were again discounted but the pace seems to be slowing.
Short harvesting, curtailed livestock availability and the lack of available trucks dominated market discussions this week. The reduced harvest due to holiday schedules have tightened the availability of many items. Livestock availability has been hampered by bitter cold and snow conditions across much of the Midwest. Trucking is an ongoing concern, which in recent days has culminated with shipments being canceled due to the lack of available haulers. Through all of these challenges, wholesale meat prices strengthened almost across-the-board this week.
Market participants are hopeful things will improve, but it’s likely they won’t, at least not until sometime next week. Whole birds and WOGs are rated full steady to firm this week. Asked and paid values continue to trend higher. The same can be said for whole breasts. The rest of the complex remains unchanged however, sources are beginning to talk up a few items. Breast meat is rated at least steady. Some sales have been confirmed at stronger values, but as a rule, bulk of sale is still market related. Tenders are mostly steady. Wings are starting to gain some traction – that is, small and medium sized wings. Jumbo wings remain mixed. Leg quarters are rated steady to full steady this week. Sellers are beginning to inch their prices higher for nearterm and out front ship dates.