Market Update From the West Coast Meatheads
May 6, 2017
Carcass cutouts this past week moved sharply higher on a daily basis. Choice Carcass Cutout bounced $16.20/cwt (or 7.37%) in a week’s time. Industry participants likely witnessed what may be the most crazy and volatile beef markets they have endured in their career.
All primal sections of carcass cutouts posted big gains, largely attributed to beef packers pushing wholesale beef prices higher as they attempted to absorb the drastically high prices paid for front-end supply.
Rib cutouts posted huge advances as seasonal interest strengthened and once again higher cash cattle prices came into formulation. Choice Rib Cutout moved $30.66/cwt higher, or 8.68%.
Middle meats were the big gainers this week, and as seen with the Rib complex, loin values posted very large week-over-week gains. Choice Loin Cutout moved a monstrous $30.08/cwt, or 9.20%.
The spot market for ground beef saw solid demand and higher wholesale values develop. Ground beef processors were working with very manageable spot inventory.
Combine a seasonal improvement in demand for middle meats with sharply higher cash cattle prices, and the result is drastically higher wholesale prices and carcass cutouts. That is exactly the scenario that has developed over the past two weeks within both commodity and Angus Beef markets. This week’s cash cattle markets saw another big swing higher with the price paid for cattle inventory. All primal sections of the Angus carcass saw price increases applied for near term bookings. Angus ground beef values also posted gains, as buyers sought product for close-in features.
After two straight weeks of a nearly steady market, the fresh pork complex started to see an improvement in seasonal interest. Now roughly three weeks away from Memorial Day, demand has increased for loins, butts, picnics and ribs, paving the way for firmer pricing.
Bone-in loins gained between $4.50 and $5.00/cwt. Boneless loins were $3.50 to $6.50/cwt higher. Tenderloins, boneless sirs and bone-in sirs gained $5.00, $4.50 and $6.50/cwt respectively. Picnics closed up $3.50/cwt while cushion meat lost $2.00/cwt.
Butts were $2.50 to $8.00/cwt higher on the week. Spareribs gained $2.00 to $2.50/cwt.
Market participants are still reporting tight supplies across most listed lines. Asked and paid values are fully supported if not trending higher for a number of items. Cutting stock WOGs are rated as full steady. Jumbo breast meat is snug and so is select sized breast meat.
Medium boneless is only fair. Tenders and wings are rated at least steady. Offerings are no more than adequate at most plants. Whole breasts, fronts, chunk and trim meat continue to move with ease. All bone-in dark meat items are fully supported.
Thigh meat and leg meat demand remains active and paid prices are full market or better.