Market Update From the West Coast Meatheads
March 11, 2017
Live cattle hit one-week highs in the nearby contracts. March feeders hit nearly a 6-week high while April and May posted 6-day highs. Steady to higher cash prices paid late Wednesday, strong beef exports in January, and short covering contributed to the gains in futures.
This week’s market focus was centered on middle meats finding spring seasonal strength. Most rib and loin offerings surged higher behind strong demand and limited supplies. End cuts were trading early week at steady/firm levels, but the attention given to chucks and rounds eased as the week closed.
The Angus cutout moved higher behind continued strength in the loin complex. Strips, short loins and top butts were the notable gainers this week. The former have experienced a head start to the spring buying period while foodservice interest for the latter has kept offerings tight. Ribs appeared to find a floor for the seasonal and were fully steady. End cuts held up better than some had expected.
The market for fresh pork products found a great deal of support this week, especially bone-in loins and butts. Availability of bone-in loins, including center cut loins, has been limited all week as production is increasingly being diverted into boning lines.
The balance of the loin complex was mixed; with tenderloins being weak. Picnic and cushion products were also supported, in-line with the trend on lean sausage materials. Butts continued to trend higher; supported by sustained export and renewed foodservice buying. Spareribs remained largely balanced; trading in a narrow range. St. Louis Ribs were also steady, and Loin Back Ribs steady/strong.
Whole birds and WOGs are rated as full steady to firm. Offerings are limited and held with very strong hands. Demand is certainly good, but supplies or the lack thereof may be more of a reason as to why values are soaring.
Breast meat is trading within a reasonable range of our quotations. Tenders are moving at supported price points. Wings have tightened as buyers look to build inventories in preparation of March Madness.
Bone-in thighs, thigh meat and leg meat continue to receive an aggressive call. All other bone-in dark meat items are fully supported, if not understated. Export demand remains active, as do domestic buyers.