A month after cash cattle prices topped out for the season, the USDA’s Agricultural Marketing Service reported a peak in whole broiler chicken prices just ahead of the dog days of summer.
In many respects, chicken is a bigger competitor to beef for consumer protein dollars than is pork, even though pork is a red meat, market analysts say. Pork does compete at some level, but heavy advertising won’t make pork much more alluring to consumers than normal.
However, chicken and beef advertising expenditures can be traced to more sales at the consumer level. Overall pork consumption will go up in the hottest part of the summer because ham is a favorite cold cut for sandwiches, but heavy advertising doesn’t seem to bring retailers the bang for their buck that chicken and beef advertising does.
CLEAR PRICE PEAKS
The national composite price for whole broilers topped out at $1.16 a pound the last week of May. This was $0.17, or 16.7%, higher than the $0.99 reported for the same week a year earlier. It also was up $0.14 a pound, or 14.1%, from the 2011-2015 average of $1.01.
The dip in chicken and beef prices is seasonal and can be tied to weaker seasonal demand, since slaughter and broiler production is only slightly above a year ago. Weekly production this year has played a small part, running generally in line with 2016 levels.
Production has only held consistently above year-earlier levels for the last three weeks, but even then, the gap has been relatively small. The gap has been greater when compared with the previous five-year average, however, as US production continues to grow.
Broiler production last week, for instance, was listed at 1.012 billion pounds, up 23 million, or 2.33%, from 989.2 million last year and up 97 million, or 10.6%, from 915.3 million in the 2011-2015 average.
BREAST PRICES SOFTEN SEASONALLY
As an example of seasonal weakness in chicken prices, one needs to look no further than the weekly wholesale price for chicken breasts. The annual price peak for this item usually comes around the third week of May, as shown by the 2011-2015 average. This average peaked at $1.66 a pound at that point.
This year, the seasonal peak was late, according to AMS data. It came in at $1.67 a pound the first week of June and has shown a weaker trend since.
Last week, chicken breast prices were listed by AMS at $1.64 a pound.
CASH CATTLE QUIET
Fed cattle sold on the livestock exchange video auction Wednesday at $123.00 per cwt for one- to nine-day delivery, down from $138.82 on June 8, the last time trading was reported on the exchange.
Cash cattle traded Wednesday at $122 to $123 per cwt on a live basis, down $10 from $132 to $133 the previous week, and at $195 to $196 dressed, down $9 to $10.
The USDA’s choice cutout Monday was down $1.18 per cwt at $238.57, while select was up $0.94 at $217.66. The choice/select spread narrowed to $20.91 from $23.03 with 79 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday was $145.84 per cwt, down $1.25. This compares with Monday’s Aug settlement at $149.45, up $4.50.