The West Coast Port workers slowdown continues impacting the Red Meat Sectors providing major “Head Winds”, but Port backups are seen as having greater impact upon the Hog/Pork sector than for Cattle/Beef sector and likely are expanding freezer stocks by default.
Last week, nearly all the Wholesale Carcass, Wholesale Beef primal cuts, Lean and Fat Beef Trimmings values were again lower to sharply lower. Mid-week Composite Choice Carcass Beef values went to $242.75 per cwt. compared with the prior week at $247.29 vs. a year ago at $216.24. Friday’s USDA posting for Choice Carcass Beef was placed at $239.08. Mid-week, Lean Domestic Fresh Cow Trimmings prices had the first meaningful price decline in more than six months. Fat Beef trimmings prices have ruptured over the last two weeks being posted Mid-week at $96.58 per cwt. compared with a week earlier at $126.75 vs. a year ago at $96.75. Friday, the USDA reported closing fresh Beef 50’s prices eroded still further to $94.08.
The Live Cattle futures began to stabilize last week. However, the Spot Fed Cattle markets premium to the Nearby Live Cattle Futures values narrowed. Spot Fed Cattle trade Friday was quoted at $162.00 showing a gain of +$1 to +$2 above the previous week. Last week, F.I. Beef production contracted -2.2% relative to year ago levels with unchanged F.I. preliminary carcass weights still holding +1.1% above year ago levels .
The cheaper Feed Grain and Oilseed prices have stimulated Broiler producers to expand output by expanding Eggs Set and by feeding birds to heavier weights. Note how Average Broiler Live Weights are now well above the longer term trend with birds consistently over 6.0#. This strong expansion in Broiler meat production is going to provide more competition for the Red Meat Sector in 2015. The Broiler sector also ships sizable tonnage into export channels.
Mid-week Composite Choice Rib Primal values eased lower again being quoted at $327.59 per cwt. compared with the previous week at $328.66 and a year ago being reported at $289.92. Seasonally, Choice Rib values tend to firm ahead of Easter. This year, Easter is two week earlier than last year.
Mid-week Choice Primal Loin prices eroded again to lowest levels seen this year; but Choice Beef Loins have a very pronounced Seasonal uptrend that typically begins in the next week or two and carries upward until early April:
Wednesday’s Choice Loin Primal prices slide some more going to $306.58 per cwt. compared with a week earlier at $310.40 vs. a year ago at $258.58. Seasonally, Beef Loin’s have a very pronounced up trending pattern typically starting in the next week or two and making highs for the year in early April. Last year, Choice Beef Loin values had an unusually robust advance to seasonal highs in early March but had a much smaller seasonal declines than usual.