Summer grilling items such as Strip Steaks and Spareribs. These items have fallen victim to poor weather so far this year; however, demand is pent up and should resurface with improved long-term forecasts. In addition, these are items are well below last year’s levels.
Pork Bellies and Bacon are well below last year (down 36%), within a seasonal uptrend, and near the level of buyers will start to purchase and store in the freezer for a rainy day.
Eggs are 43% lower than this time last year. Eggs typically rise this time of year. Any buyer who worked during the Avian Flu epidemic knows the value in locking this item in on a long-term contract at price levels near all-time lows.
What to Watch for – The Buyers’ Perspective
According to a Reuters report released June 30th, industry insiders say the swine fever toll in China may be twice as high as reported. African Swine Fever has had some influence on the market thus far, but not to what many people feared. We believe this is the calm before the storm. Although pork prices have risen in China in some areas, they have not had the severe reduction in pork production as forecasted. This is because any farmer has a healthy animal is bringing it to slaughter to avoid getting the virus. This is causing a flood of production in the near term. However, once this cycle crop is complete and the Chinese, according to their government, are facing a minimum loss of 20% of their herd. Meanwhile, private analysts forecast between 40%-50%. This will affect all proteins across the board as chicken and beef will become substitutes for the Chinese staple.