Hog slaughter has been operating above yr in the past ranges within the final two weeks however since early March slaughter has been about the similar as final yr whilst weights were decrease, leading to much less beef to be had within the spot marketplace.
Highlights
- Hog slaughter has been operating above yr in the past ranges within the final two weeks however since early March slaughter has been about the similar as final yr whilst weights were decrease, leading to much less beef to be had within the spot marketplace.
- Call for for recent beef has been tough as prime meat costs have led to outlets to concentrate on price cuts, corresponding to loins, butts, and ribs.
- Ham costs had been sharply upper in overdue March and early April following a surge in orders from Mexico, with some 75k MT of beef booked in simply 3 weeks. On the other hand, as order go with the flow has bogged down, ham availability has stepped forward.
- The robust US greenback is also unfavourable for US exports to Asia however the robust peso has supported exports to Mexico. Whether or not that continues can be a major factor.
- Beef trim costs are company and anticipated to development upper on tough call for and seasonal provide relief.
Complete File
Within the final two weeks hog slaughter has averaged 2.485 million head/week, 2% upper than a yr in the past. Does this imply the March ‘Hogs and Pigs’ document was once incorrect? Now not truly. Weekly hog slaughter for the reason that first week of March has been a complete of 17.205 million head vs. 17.207 million head throughout the similar duration final yr. The stock survey pegged the provision of hogs over 180 kilos 0.6% less than the former yr and the provision of hogs 120-179 kilos 0.3% above yr in the past. Present figures recommend we’re reasonably forward of the ones figures however now not via a lot. The survey additionally advised that the stock of hogs that may come to marketplace between June and August will have to be between 1.5% and a couple of% upper than a yr in the past. Closing yr, weekly slaughter for non-holiday weeks in June and July averaged 2.35 million head/week. A 2% building up would put weekly slaughter at 2.4 million, about 85k head less than present ranges. Moreover, hog carcass weights development decrease throughout that point of yr, subtracting extra kilos from to be had provide.
Up to now this spring, recent beef costs have carried out rather smartly. The loin primal price on the finish of the week was once $99.5/cwt, 23% upper than a yr in the past, matching the associated fee ranges in 2021 and 2022 regardless of the rise in manufacturing. Contemporary beef call for is in just right form as outlets glance to characteristic more cost effective proteins. Different recent beef costs are appearing rather smartly additionally. The price of the butt primal on Friday was once $130/cwt, 18% upper than a yr in the past and the rib primal at $165/cwt was once 46% upper. At this level, it seems that that 2022 is a greater comp than 2023 for recent beef, one thing that’s additionally mirrored in present futures pricing.
Processing pieces have up to now carried out in step with expectancies. We proceed to suppose that export call for stays a key driving force for ham values. A hurry of export orders for Mexico helped push ham values previous $90/cwt in early April. Now that Mexico call for has pulled again so have ham values. Some other indication that home ham call for is lackluster at best possible is the weak point within the price of boneless hams. Packers will glance to promote bone-in hams ahead given the loss of boneless call for. We expect marketplace has extra problem possibility for the autumn that futures are these days indicating.
The similar common sense applies to bellies. Up to now the abdominal marketplace has been buying and selling sideways, which isn’t extraordinary for this time of yr. Futures are these days suggesting that abdominal costs will/will have to be upper throughout Jun-Aug. However because the dialogue within the earlier phase advised, a slowdown in foodservice gross sales items some problem possibility for pieces that depend closely on foodservice gross sales, corresponding to bellies. Extra importantly, the drawback possibility for bellies is upper within the fall when foodservice gross sales seasonally decline whilst hog slaughter climbs over 2.6 million head/week. Our forecast is these days calling for abdominal costs to be resilient within the fall however we additionally acknowledge that at the moment there may be extra problem than upside possibility to our forecast for that point of yr.
Value Chart
Forecasts
Steiner Consulting Staff produces the Nationwide Beef Board publication according to data we consider is correct and dependable. On the other hand neither NPB nor Steiner and Corporate warrants or promises the accuracy of or accepts any legal responsibility for the information, reviews or suggestions expressed.