Avian Flu now has been detected in 34 states adding two more states to the list. Around 38 million birds have been depopulated and removed from the food supply which is up about 1 million for the week. We are seeing slower growth each week and as I understand it this virus is not hardy in warmer weather. Heading into summer we should see things calm down, but the effects of this outbreak should not be minimized. Egg layers and turkey producers have been severely affected. Expect turkey products to be tight and expensive, and I’m not even talking about the holidays. Looking at chicken and this song is the same. Breast meat is higher still and no sign of stopping. Wings maybe are about as low as we are going to see. I’m not expecting wings to move higher just seems we may be at the bottom here. Production numbers are not increasing to keep pace with the strong demand. Things could be getting tight on breast meat in the next few weeks. Hard to buy ahead on fresh product but I would not recommend running this inventory tight.
BEEF Beef production continues strong with 657K head harvested last week, up from 649K the week prior. This strong production is keeping beef available. But weaker than expected Easter demand and early looks at Mother’s Day seem disappointing I don’t see this market roaring into Memorial Day but I do think we will see some deals and a bargain or two to keep the product moving. Other than ground beef which is pretty steady, all the other cuts are moving lower, some faster than others. Middle meats are coming off a bit, rounds and chucks are down as well. While still relatively expensive, beef is not pushing higher right now.
PORK. Let’s look at pork and bellies are finally back in reasonable pricing territory. Yesterday’s bellies closed at $136 down from last week $154. A month ago we were at $189. Time to buy. Butts and ribs are moving higher, export demand is not strong at present but this time of year harvest is reduced and we usually see an increasing market. As I always say.. the pork loin is the value.
Grains Corn closed just over $8 at $8.01 up from last week’s $7.97. Corn planting continues well behind schedule with 22% of the crop planted compared to the 5 year avg of 50% at this time. Not much changed from news out of South America with less than hoped for production. Demand for US corn will continue and pricing isn’t coming down any time soon. Soy is also running behind with 12% planted compared to the 5 year avg of 24% at this point. South American harvest is about complete with again, less product than hoped for. Indonesia has not removed their ban on exports of palm oil continuing to push soy higher. Fortunately we did break the three week streak of ever higher market prices, but there continues to be high demand for soy. Wheat and same story as corn and soy with the spring wheat crop, 27% in the ground vs expectations of 47%. Winter wheat crop is rated at 29% good/excellent and 39% poor/very poor compared to last year at 49% good/excellent and 18% poor/very poor. So a poor winter wheat crop, word India is having a poor crop this year as well, late planting spring crops, and we find ourselves again with wheat pricing moving higher and availability staying tight.
DAIRY – Through Thursday, Barrel is up 4, block is down 5 and butter is unchanged. Milk seems to be adequate to meet current demand both cheese and butter. Typically we see increasing markets in late spring but think any increases will be muted and pretty moderate.
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