Week of December 16,2008

Meat Sheet
December 16, 2008
By Don Patman

BEEF’s live cattle price slipped down last week. It moved below last week’s .87. There is a great deal of uncertainty out there. As the market shows softness, most buyers are proceeding with caution. Because of the world’s economic crisis, we note hesitation throughout the protein industry. There are questions of supply in the short run. As buyers hold inventories low, they still have to fold in the lost production days during the Christmas and New Year’s holidays. Low inventories lead to emergency buying needs and lost production days lead to unavailable supplies. There are some tough buying decisions coming up during the next few weeks. Currently, grinding meats are mixed. Fifty percent lean beef trimmings pushed up to .71 from last week’s average price of .69. Ninety percent lean domestic beef slipped down to 1.20 from 1.26. Ninety percent lean imported beef pushed up to 1.30 from 1.28. With the above 10 cents per pound difference, it tells us the domestic usage will push up quickly over the imported product. USDA graded Choice boxed steak subprimals were mixed too. Striploins for New York steaks dipped down to 3.06 from last week’s average price of 3.09. Top sirloins moved up sharply to 1.98 from 1.86. Ribeyes, #112A, crashed down to 6.28 from 6.59. Tri-tips climbed up to 2.06 from 2.05. Flap meat held steady at 2.78. USDA graded Choice beef end-cuts subprimals were down. Choice, boneless, chuck shoulders dipped down to 1.49 from 1.52. Top rounds fell to 1.48 from 1.50.

PORK has the same new economic rules as described above for beef. Although the packers are slaughtering large amounts of animals, the live market price is dropping. The daily slaughter numbers are over 430,000 hogs. This is close to capacity. Nevertheless, live animal supply is overpowering the packers. Naturally, they are holding back on live supplies due to the forthcoming lost holiday production days. With all that said, the live price is drifting down. Currently, bellies for sliced bacon slipped down to .72 from last week’s average price of .74. Legs for hams drifted down to .54 from .58. Loins pushed up to .75 from .72. Seventy-two percent lean pork trimmings are holding steady at .35. Boston butts slipped down to .67 from .68. Spareribs moved up to .88 from .87.

CHICKEN is a story of the ‘same ol’ things’. Six to seven weeks ago, the industry cut back on the set eggs by 10 to 11%. Now, certain parts are in short supply; and thus, their prices are up. In particular, the dark products are escalating quickly. As our dollar declines in value, overseas buyers are ordering our chicken leg-quarters in growing volume. This should hold for at least a month. We feel it will be longer. Next week, look for white meat shortages. Breasts and tenders will get stronger in price on a continuing basis. The chicken packers have 2 choices. Either go bankrupt or raise prices are their options. Currently, breasts moved up to 1.16 from last week’s average price of 1.15. Tenders held steady at 1.18. Boneless chicken thigh meat moved up to 1.06 from 1.02. Wings moved up to 1.20 from 1.18. Whole birds are steady at .88.

TURKEY demand, if it exists, is very soft. Buyers’ needs, complicated by our economic problems, are substantially off. Whole birds are hard to move; and, orders are dwindling. Currently, boneless breasts slipped down to 1.50 from last week’s average price of 1.52. Tenders drifted down to 1.40 from 1.41. Boneless turkey thigh meat held steady at 1.04. Whole birds, toms and hens, are a real value at their current low prices.

Week of December 9, 2008

Meat Sheet
December 9, 2008
By Don Patman

BEEF’s live cattle price slipped down last week. It moved from the .90’s to .87. These numbers are indicative of these special economic times. Prices are sliding as our consumers are focused on conserving their disposable cash. In fact many do not have any disposable cash; thus, they ‘pass’ on purchasing expensive animal protein products. Most buyers, retail and foodservice, are holding back on accumulating inventories. They buy short; as they look for lower prices. Almost all the beef subprimals are down. Tri-tips are the only ‘up’ item. At the moment, grinding meats are mixed in price. Fifty percent lean beef trimmings dropped to .68 from last week’s average price of .70. Ninety percent lean domestic beef moved down to 1.26 from 1.28. Ninety percent lean imported beef pushed up to 1.29 from 1.28. USDA graded Choice boxed subprimals were down. Striploins for New York steaks slid down to 3.06 from last week’s average price of 3.20. Top sirloins dropped down to 1.88 from 1.90. Ribeyes, #112A, crashed to 6.28 from 7.17. Tri-tips pushed up to 2.06 from 2.05. Flap meat fell to 2.78 from 2.82. USDA graded Choice boxed beef end-cuts moved down. Choice, boneless, chuck shoulders slipped down to 1.53 from 1.55. Top rounds fell to 1.50 from 1.53.

PORK’s live price is holding steady as we write. Terminal animals, as well as, many direct supplies are in a virtual ‘hold’ position. Most of the national publications look for a continuing down market. We will watch this very closely for you; and, report changes as they occur. Simply, as in beef, there is a declining market out there. The slaughter numbers are very large. They continue to hit over 430,000 animals per day. Currently, bellies for sliced bacon are holding steady at .76. Legs for hams moved up to .58 from last week’s average price of .50. Look for this item to be down next week. Loins dipped down to .71 from .72. Seventy-two percent lean pork trimmings dipped down to .36 from .37. Boston butts moved up to .70 from .68. Spareribs held steady at .87.

CHICKEN continues to be a ‘mixed bag’. Just as in the other animal proteins, we have a weakening demand out there. Frankly, consumers are just out of cash. They are holding back. For several weeks, the packers reduced the ‘eggs placed’ by 3%. For the past nine weeks, they reduced the ‘eggs placed’ by 10%. Next week should show some higher random breast prices. And, these numbers should be firming through the beginning of the following month. Chicken dark meat has hit its lowest price for the season. Look for domestic increases for the next several weeks. Russia and the former Soviet Bloc have resumed their orders for USA dark products. This had been lost for political reasons. Those problems have been resolved; and, thus, our chicken dark meats are moving overseas. Currently, chicken products are mixed. Boneless, skinless, random, breasts moved up to 1.16 from last week’s average price of 1.15. Tenders pushed up to 1.18 from 1.15. Keep in mind that the foodservice industry pushes the up’s and downs of chicken tenders. Boneless chicken thigh meat held steady at 1.02. Wings muscled up to 1.18 from 1.14. This is the season for wings to be used in quantity. They are mostly a celebration food; and, they will stay up in price through Super Bowl Sunday. Whole birds are holding steady at .88.

TURKEY is a story of ‘lower’. This is that time. Boneless breasts moved down to 1.50 compared to last week’s average price of 1.54. Tenders slipped down to 1.40 from 1.42. Boneless thigh meat held steady at 1.04. Whole birds are mixed. It depends on inventories. Those packers that are short of whole birds are selling high. Those packers with inventories are pushing them out at lower prices.

Week of December 2, 2008

Meat Sheet
December 2, 2008
By Don Patman

BEEF’s live cattle price, from the feed lots is not established so far. The packers are offering live cattle at .92; but, so far, new actual deals are unavailable. We will report more on this as it develops. The whole posture of beef shows softness. End cuts as well as loin sub-primals seem to be dropping. Some pieces such as prime ribs will hold their own. This is an important part of the Christmas/New Year celebration time. Many so called non-celebration cuts will flounder in price. We expect the industry to reduce their kill numbers as we proceed into December. This, if it occurs, will push up the price of 50% lean beef trimmings. Grinding meats are generally down. Fifty percent lean beef trimmings dropped to .70 from last week’s average price of .72. Ninety percent lean domestic beef moved down to 1.28 from 1.31. Ninety percent lean imported beef held steady at 1.29. USDA graded Choice boxed beef subprimals were down. Striploins for New York steaks drifted down to 3.20 from last week’s average price of 3.23. Top sirloins fell to 1.92 from 1.94. Ribeyes, #112A, moved up to 7.18 from 7.15. Tri-tips pushed to 2.06 from 2.05. Flap meat remained steady at 2.82. USDA graded Choice boxed beef end-cuts were down too. Choice, boneless chuck fell to 1.60 from 1.57. Top rounds slipped down to 1.54 from 1.61.

PORK is surprising all of us. Even the live price is strengthening. Most forecasters are stuck in the middle. There is a bunch of guessing going on. Nevertheless, at the moment, prices are up! The slaughter numbers are over 430,000 animals per day. Currently, bellies for sliced bacon pushed up to .78 from last week’s average price of .73. Legs for hams jumped up to .51 from .43. Loins advanced to .73 from .72. Seventy-two percent lean pork trimmings climbed up to .38 from .37. Boston butts moved up to .69 from 65. Spare ribs spiraled up to .87 from .86.

CHICKEN continues the same patterns. The industry is losing big money. An example of that was in Monday’s Wall Street Journal; which showed a major chicken packer taking a bankrupted chapter. This company had been in financial trouble for several months. The industry is taking 2 steps. First, they are producing smaller birds. And, they are reducing the eggs-set by 3 percent for the next 2 weeks. Following that, they will reduce the eggs-set, weekly, by 10 percent. For their sake, let’s hope they do it. Reducing supply will push prices up. We look for another price raise prior to month’s end. Dark meats are very steady as we write. Currently, random, boneless breasts moved up to 1.16 from last week’s average price of 1.09. Tenders pushed up to 1.14 from 1.13. Chicken thigh meat held steady at 1.02. Wings climbed up to 1.14 from 1.11. Whole birds moved up by .25 per hundredweight.

TURKEY is facing the opposite side of the demand curve. Just before Thanksgiving, turkey demand was great. Now, the reverse is happening. There are many different prices out there; as, sellers push to clean up inventories. This, too, will settle down as turkey returns to the normal trend lines. At the moment, boneless breasts slid down to 1.54 from last week’s average price of 1.58. Tenders dropped to 1.42 from 1.44. Turkey thigh meat held steady at 1.04. Whole birds are at different prices depending on the seller’s inventories. We will report more on this as the market pricing settles down.

Week of November 18, 2008

Meat Sheet
November 18, 2008
By Don Patman

BEEF’s live cattle price, from the feed lots remained at .92. It is not news that the average American consumer’s disposable cash is limited. Not only that, but, it is becoming more limited! The news is full of stories about job reductions; and, this unemployment is becoming larger as the days go by. Therefore the reduction in beef usage is growing daily. The big fear in the protein industry is ‘oversupply’. Thus, in all corners of this industry, from packers to distributors, inventories are being held to absolute minimums. No one in the supply chain wants their money tied up in excess perishable inventories. The key word is ‘caution’. And, just for the record, price increases on high priced beef are very difficult to maintain. At the moment, grinding meats are mixed. Fifty percent lean fat trimmings moved up to .86 from last week’s average price of .85. Ninety percent lean domestic lean beef dropped down to 1.36 from 1.40. Ninety percent lean imported moved down to 1.33 from 1.36. USDA graded Choice boxed beef steak subprimals were mostly up. Striploins for New York steaks remained steady at 3.24. Top sirloins pushed up to 1.98 from last week’s average price of 1.95. Ribeyes, #112A, exploded up to 7.08 from 5.98. Tri-tips pushed up to 2.06 from 1.94. Flap meat moved up to 2.82 from 2.62. USDA graded Choice boxed beef end-cuts were mixed. Choice, boneless chuck shoulders held steady at 1.64. Top rounds climbed up to 1.74 from 1.70.

PORK’s economics are driven by the same factors as beef. The shrinking disposable income of our consumers is influencing everything. Certainly, there are ‘time-outs’ for holidays and celebration times. Nevertheless, our daily meat and poultry is controlled by current events; and, those events have and are reducing cash for expensive animal protein foods. The live price of butcher hogs is up for the week. The packers will lose valuable production time during the Thanksgiving holidays. They are over-slaughtering now in anticipation of the forthcoming production time losses. The daily numbers are over 430,000 hogs. This is close to the maximum industry potential. Currently, bellies for sliced bacon slipped down to .68 from last week’s average price of .70. Legs for ham climbed up to .43 from .40. Loins dropped down to .73 from .77. Seventy-two percent lean pork trimmings slipped down to .42 from .45. Boston butts crept up to .63 from .60. Spareribs held steady at .87.

CHICKEN, as many understand, is keyed, at times, by the street or cash price. The cash price for random, boneless, skinless breasts has been about .80 F.O.B. the packer’s plants. Today it is .90. Yes, the market for random breasts has strengthened. This industry is in about the same shape today as the automobile industry was 3 months ago. The chicken industry is heading for government relief loans; unless, they take some drastic steps. They are doing that now. They are reducing the growth or size of the whole birds. They are also reducing the eggs set by at least 10%. Thus, they hope to get higher prices by reducing available supplies. Let’s hope they succeed. Many are reporting that supplies will be reduced 3% by December 1 and 7% by January 1. We will watch this very closely for you. Dark meat is a story of variable demand. Russia and the former Eastern Bloc is buying less as they increase growing their own supplies. Cash to purchase imported leg-quarters is, also, a problem for them. Currently, the national price sheets show random breasts up to 1.08 from last week’s average price of 1.07. Tenders remain steady at 1.06. Chicken thigh meat slipped down to 1.02 from 1.10. Wings moved up to 1.08 from 1.06. Whole birds slid down .25 per hundredweight.

TURKEY is approaching that wonderful time of Thanksgiving. All those whole birds, toms and hens, are ready to be consumed. Most of the whole bird purchasing is fill-in. The big contracts have been negotiated for some time. Downward price changes are coming. This will be discounts on breasts and whole birds. Currently, boneless breasts pushed up 1.70 from last week’s average price of 1.69. Tenders are holding steady at 1.50. Turkey thigh meat is steady, too, at 1.04. Whole bird fill-ins are anyone’s guess. Each plant makes it own deals. Happy Thanksgiving to one and all!

Week Of November 11, 2008

Meat Sheet
November 11, 2008
By Don Patman

BEEF’s live cattle price, from the feed lots, strengthened to about .92. This is a dollar per hundredweight higher than last week. The beef packers are continuing their reduction of slaughter numbers to push finished product prices up. This will short the finished product supplies; and, hopefully prices increase. As we all know, November is turkey month; thus, we might have to wait until December for a true perspective on this. We will watch these changes very closely for you; and report additional information as it occurs. At the moment, grinding meats are mixed in price. Fifty percent lean beef trimmings pushed up to .86 from last week’s average price of .80. Ninety percent lean domestic beef slipped down to 1.40 from 1.48. Ninety percent lean imported beef moved down to 1.35 from 1.40. USDA graded Choice boxed beef sub-primals were mixed too. Striploins for New York steaks fell down to 3.24 from 3.28. Top sirloins advanced up to 1.98 from 1.93. Ribeyes, #112A, exploded up to 6.38 from 4.67. Tri-tips climbed up to 1.96 from 1.88. Flap meat moved up to 2.62 from 2.38. USDA graded Choice boxed end-cuts were up. Choice, boneless chuck shoulders pushed up to 1.64 from 1.58. Top rounds climbed up to 1.74 from 1.60.

PORK supplies have been dropping. Currently, most experts expect the sub-primal cuts to move up slightly. This will terminate during Thanksgiving week; but, just following that, many of our national retail food chains will feature pork. The slaughter numbers have been very high; and, are expected to remain there. Many days during the week, the packers are killing over 430,000 animals. Currently, bellies for sliced bacon moved up to .72 from last week’s average price of .70. Legs for hams dipped down to .40 from .47. Loins slipped down to .78 from .84. Seventy-two percent lean pork trimmings dropped to .46 from .47. Boston butts dipped down to .61 from .64. Spareribs moved down to .86 from .90.

CHICKEN’s packers continue to reduce the eggs set. Nevertheless, the bottom has dropped out of the dark meat sales. The industry has been exporting most of our domestic chicken leg-quarters to Russia and Eastern Europe. Along with the strengthening of the American dollar, many of Europe’s buyers are unable to obtain the necessary loans to pay for our dark meat products. We understand that there are many container loads overseas; which, cannot be sold. That does not include our current production of dark meat products. Therefore, we are seeing a serious sales reduction of our dark meat products. We are oversupplied with unsalable product. We also note some commentary in the current Wall Street Journals’ reporting of huge financial problems within the top US chicken companies. They have been losing millions of dollars; and consequently, many are having great financial difficulties. We will report more on this as it develops. Currently, random, skinless, boneless, breasts moved up to 1.08 from last week’s average price of 1.07. Tenders held steady at 1.06. Chicken thigh meat dropped to 1.08 from 1.18. That is the largest downward movement in months. Wings remain steady at 1.06. Whole birds slipped down to .87 from .88.

TURKEY prices are not making any significant moves. As noted in past Meat Sheets, this year’s prices are lower than 2007. The industry is not able to move prices up to compensate for their increased corn feed costs. Many of the Thanksgiving whole bird’s deals are negotiated. The cuts are just treading water. Currently, boneless breasts moved up to 1.70 from last week’s average price of 1.69. Tenders are holding steady at 1.50. Boneless thigh meat is steady at 1.04. Whole birds are floating out there. Their prices are subjects to plant availability.

Week of November 4, 2008

Meat Sheet
November 4, 2008
By Don Patman

BEEF’s live cattle price, from the feed lots dropped to about .91 plus. This is just a fraction higher than last week. We have learned that the packers have lowered their slaughter numbers. In fact, Monday of this week showed such a reduction. Therefore, we can look for increases in live cattle prices. Rib and loin subprimals are up slightly. The end-cuts, too, seem to be increasing in price. Cold weather will stimulate these purchases. We are watching the export market. Universal cash problems seem to be reducing sales. We will be watching this for you. Currently, grinding meats are mixed in price. Fifty percent lean beef trimmings pushed up to .82 from last week’s average price of .81. Ninety percent lean domestic beef dipped down to 1.48 from 1.51. Ninety percent lean imported beef slid down to 1.39 from 1.45. The imported beef item has dipped down from 5 or 6 cents above the market to 5 or 6 cents below the market. Our west coast buyers are using the overseas’ product; while our mid-west buyers are using domestic product. USDA graded Choice boxed steak sub-primals are mostly down. Striploins for New York steaks dropped down to 3.24 from last week’s average price of 3.35. Top sirloins moved down to 1.92 from 1.97. Ribeyes, #112A, exploded up to 4.98 from 4.49. Tri-tips dipped to 1.88 from 1.89. Flap meat reversed course and moved up. It hit 2.38 compared to 2.37. USDA graded Choice boxed end-cuts were mixed. Boneless, Choice, chuck shoulders dipped down to 1.60 from 1.61. Top rounds held steady at 1.60.

PORK’s live price is sliding down. There seems to be too many hogs for the current consumer’s pocket book. Almost all of the retail items are down as is the live price. Nevertheless, somehow the packers’ cut-outs are profitable. They continue to slaughter more than 430,000 hogs per day. That is huge compared to past standards. Even with the export sales diminishing, the slaughter numbers remain large. We will watch this very closely for you. At the moment, bellies for sliced bacon dropped down to .68 from last week’s average price of .70. Legs for holiday hams moved down to .46 from .54. Loins slid down to .85 from .90. Boston butts eased down to .62 from .68. Spareribs fell to .88 from .94.

CHICKEN suppliers remain in unprofitable positions. We have been reporting this for some time; but, the industry has not yet truly reduced supplies. Recently, due to overseas buyers significantly lowering their leg-quarter bids, the industry has taken, yet, another hit to their profits. They have to move the dark meats; thus, they take the overseas reduced prices to clean up their unsold inventories. They, simply, have no choice. These buyers are pushed backwards with our more expensive American dollars and their problems obtaining cash in these cash-poor times. Thus the price of our dark meats is almost in ‘free fall’. Currently, random breasts slid down to 1.08 from last week’s average price of 1.11. Tenders dipped down to 1.06 from 1.10. Boneless thigh meat fell hard to 1.16 from 1.28. Wings held steady at 1.06. Whole birds slipped down .25 per hundredweight to 87.25 per hundredweight.

TURKEY is hit by the same problems that are hurting the other animal protein packers. Reduced consumer spending, increased feed costs, and overseas money problems are hurting sales. Frankly, there is no mercy for our packers. They must simply manage better; and, hold their resources together until better times arrive. At the moment, boneless breasts pushed up to 1.70 from last week’s average price of 1.69. Tenders remained steady at 1.50. Turkey thighs remained steady, too, at 1.04. Whole birds are available and probably less expensive. Prices seem to be lower and all over the map.

Week of October 28, 2008

Meat Sheet
October 28, 2008
By Don Patman

BEEF’s live cattle price, from the feed lots dropped to about .88. This splits a high of .91 and a low of .85. It produces an average of .88. This price is very close to last week’s .875. We note, so far, that this market seems quiet and slightly steady. In reality, it will begin a steady decline as we approach the November Thanksgiving holidays. December is traditionally a celebration month. There, we should see an upward surge in beef rib and steak prices. The weather has not been terribly bad so far. Thus, the end-cuts which support indoor roasting have not taken off. Some cold weather might change that in a hurry. We will watch this very carefully for you; and, report new information immediately. Currently, grinding meats are mixed. Fifty percent lean beef trimmings pushed up to .82 from last week’s average price of .80. Ninety percent lean domestic lean beef moved up to 1.54 from 1.50. Ninety percent lean imported beef settled down to 1.46 from 1.50. USDA graded Choice boxed beef steak sub-primals were mostly down. Striploins for New York steaks held steady at 3.36. Top sirloins held steady, also, at 1.98. Ribeyes, #112A, crashed down to 4.38 from last week’s average price of 4.79. Tri-tips were steady at 1.90. Flap meat jumped down to 2.38 from 2.47. USDA graded Choice boxed beef end-cuts slid down. Boneless, chuck shoulders dropped down to 1.62 from last week’s average price of 1.71. Top rounds moved down to 1.60 from l.66.

PORK’s live hogs seem to be oversupplied. That market continues to drop. The packers are killing over 430,000 hogs per week day. And, there is a large number being slaughtered on Saturdays. This is very close to capacity. Nevertheless, the animals keep coming; and, the live market price drifts down. Currently, bellies for sliced bacon moved down to .68 from last week’s average price of .75. Bellies seem able to hold at this new low price. Legs for hams pushed up to .54 from .48. Loins held steady at .89. Seventy-two percent lean pork trimmings climbed up to .49 from .48. Boston butts remained steady at .69. Spareribs moved up to .94 from .92.

CHICKEN has problems. Truly, there is nothing new; with, one exception. The golden goose is disappearing. As mentioned, last week, our dark meat export business to Russian and Eastern Europe is going away. As the US dollar gains strength and the Russia buyers run out of cash, they are finding less expensive sellers to cover their needs. Our product has become more expensive. Thus, this puts more pressure on the white meats, random breasts, and tenders, to make up the difference. Unfortunately, this is not happening. The stock market shows this; as, we note, that many of the large chicken packers’ stock value is dropping. As always, we will watch this for you and report the changes as they occur. At the moment, chicken is mixed in price. Boneless, skinless, random, breasts pushed up to 1.12 from last week’s average price of 1.11. Tenders remained steady at 1.10. Boneless thigh meat dropped down to 1.26 from last week’s average price of 1.30. Wings held steady at 1.06. Whole birds held steady, too, at 88.75 per hundredweight.

TURKEY’s story is much the same as chickens. Prices are down; while costs are up. Feed costs are the major production problem. And, even whole bird prices are drifting down. As we prepare to enter November, we find it most difficult to get a fix on whole bird prices. Currently, they are slipping down. At the moment, boneless breasts moved up to .82 from last week’s average price of .80. Normally, at this time of the year, breasts are priced much higher. Turkey tenders are steady at 1.50. Turkey thigh meat holds steady at 1.04.