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For the week ending March 2nd, chicken slaughter was up 1.5% from the week prior, and near 2% over a year ago, but relatively lackluster harvests in preceding weeks left the 6-week average down 1.2% year over year. Additionally, lighter bird weights further tempered ready-to-cook (RTC) production, with RTC chicken output falling 2.2% (yoy). Amid lower outputs, chicken prices are starting to perk up, with chicken breast meat values moving over $1.10 earlier this week. Chicken wing prices have been slow to decline, but are falling, none-the-less. The price spread between breasts and tenders remains wide and suggests that chicken breast prices should increase soon.
Despite slightly lighter cattle carcasses, beef output last week was mostly flat with the prior week and a year ago. Cattle slaughter is expected to increase into the spring, pushing beef production higher, but interest for Choice middle meats for grilling season will likely keep beef prices supported. Beef 50’s continue to edge higher but remain well below year ago levels. Further gains across the fat trim markets are projected into late spring. The 90’s lean beef trimmings are posting modest gains as well, as weekly cow harvests decline seasonally. Look for the steak cuts and ground beef markets to move seasonally higher soon.
Hog harvests pushed over the 2.5 million head mark last week, boosting pork production more than 4% from the week prior and nearly 6% over last year. With both bellies and hams posting notable price increases across the past couple of weeks, the USDA pork cutout is moving well off lows posted in late February. Sharp appreciation across the belly primal comes against seasonal expectations, but attractive prices in the low$0.90’s fueled renewed wholesale buying interest. Belly prices may be choppy until seasonal strength occurs this spring.
T Solid domestic salmon demand continues to support the salmon markets near to above year ago levels. Salmon imports have been solid as well, however, tempering the upside in the markets. During December, total salmon imports were .6% better than 2017 with Atlantic salmon filet imports higher by 9%. The upside risk is likely limited in salmon prices.
Avocado supplies have been adequate to ample this winter, keeping a lid on prices. This is due to strong imports from Mexico. U.S. avocado imports from Mexico last week were 17% more than the same week last year. Yet, California avocado shipments are expected to track well below 2018 levels in the coming months which suggests that higher avocado prices could be forthcoming. But runaway avocado markets are not anticipated unless shipments decline from Mexico. Lettuce supplies are starting to improve, driving lettuce prices lower.
THE KITCHEN SINK
The butter markets have been steady, and the cheese markets have fallen modestly during the last week. Per the USDA, January milk output was up .9% despite the milk cow herd being down .9% year-over-year. The milk per cow yield was 1.8% better than a year ago. Farmers added a net 2k to the herd which was the first increase since May. Recently rising milk prices are aiding margins which could temper the seasonal price gains for butter and cheese. The spot butter market tends to move notably higher from late-March through mid-June. The cheese markets are usually choppy in March.
U.S. wheat prices have fallen sharply in the last month. World prices have been fading also, influencing the domestic markets downward. Russian supplies are tight which suggests that the downside price risk in wheat from here may only be modest this spring.
The EIA’s most recent national average retail diesel fuel price was $3.079/gal., the highest since December and 3.5% more expensive than a year ago. U.S. diesel fuel inventories for the week ending March 1st were 11.6% less than the three-year average for the week. Diesel fuel prices usually firm in the spring.