Best Value Buys
- Pork Loins are seasonally bottoming, and they are one of the few protein items that are lower year over year (down 6.9%).
- Hams were down 17% last week, and are seasonally flat now, but they will be in demand as we approach the holiday season in a couple of months. They are also in a price area that has seen price support before.
- Despite being 6.28% higher than last year, Beef Tenderloins are still considered a good value buy. Most items in the beef complex are much higher than last year, but Tenderloins are relatively cheap. In addition, they are beginning a seasonal uptrend that should last to early December.
- Butter was down nearly 2% last week, despite being in a historical, seasonal uptrend that will last until the baking, holiday season. Trade believes that many end-users are still uncovered for the fall and holiday baking season. This potentially sets up a very bullish scenario that buyers want to stay in front of.
What to Watch For – The Buyers’ Perspective
- Despite all the talk of increasing production the past few years across the protein sector and the trade war, most items are trading at levels above their corresponding week from a year ago. It is very difficult to forecast demand. It only seems to be known after the fact. Demand has been great and I would not be surprised if that trend continues.
- As Labor Day comes and goes, look for grilling items to fall in price (strips, ribeyes, ribs, etc.) and slow-cook items to gain value (briskets, butts, ground beef).
- Chicken Wings, although 20% higher y/y, should maintain some support the next few weeks as the football season begins.
- With the ominous spreading of ASF throughout the world, it may be more prudent to have more pork on hand than less, as exports should increase in the coming months. The wildcard in this story is if it hits on the CONUS; then, prices should plummet in the immediate as farmers will bring their stock to market to avoid infection, causing a ballooning of short-term supply.
