The (Ongoing) Price Of The Pandemic

COVID is hitting beef production pretty hard.  The last two weeks harvest has been at 620K head which is not sufficient to meet demand.  Pricing is mover higher to reflect the scarcity of product.  Ground beef usually moves up this time of year but it is in overdrive right now.  Chucks, and rounds are showing seasonal strength but we are also moving higher in middle meats, in the dead of winter, the lowest demand time of the year.  Until we see production numbers increase I don’t see this changing.    PORK.  Pork bellies closed at $1.47 up just a bit from last week’s $145.  I think we will see bellies with a steady move higher for the next few weeks then some lower movement once we get into February, but not just yet.  Labor challenges are having an impact on production and product availability.  Those items that take extra time in the plant, ie boneless butts vs bone in butts or boneless loins vs bone in loins will not be in abundance and will carry a strong premium to their less processed counterparts, hence you’ll see increases in boneless butts and loins while bone in product will be holding pretty steady.   CHICKEN – Chicken production is holding up pretty well.  Demand for breast meat continues very strong and pricing is moving higher still.  We are into serious wing demand season with football heading toward its season end and college basketball heating up.  The only way to look at wings is the market is up.  Demand continues to be there for chicken and compared to other proteins the cost advantage continues.                                                                              GRAINS –Commodities overall are heating up as inflation concerns filter to commodities.  Corn closed at $6.20 yesterday up from last week’s $6.14.  South American crop news continues to be pessimistic the corn and soy crops.   Soy is moving higher quickly.  We may be in for another round of price increases from heavy soy using industries.  Concerns for wheat are reflected in the Russia – Ukraine situation and possible disruptions for Black Sea shipments.  Commodity grains will be worth watching as inflation, weather and politics all combine to cost us money.    DAIRY –  Finally a look at Dairy, I thought we might have topped out with the recent butter run up, but no, there is more to go.  So far this week butter is up another $.11.  Fewer dairy cows, a light cold storage inventory and all the increased expenses to operate are holding butter prices higher.  In conjunction with the butter prices, expect higher prices on heavy cream and cream cheese (if you can find it).  I’m still holding hope we’ve hit a current peak on butter.  Cheese however has peaked.  Thru Thursday, Block is down .14 and barrel is steady.  Cheese prices are pretty high now but we should see this is move lower for the next couple weeks.    Learn more at savalfoods.com/market-trendsSavalfoods.com | Find us on Social Media: Instagram, Facebook, YouTube, Twitter, LinkedIn