The Dish Market Report, April 2, 2020

top of mind news


For the week ending March 21st, total chicken slaughter increased modestly from the week prior, but was up 5.1% from year ago levels. RTC production remains robust though, up 8.3% from the year prior. As retail channels are filling in following the active panic buying, wholesale chicken prices have been declining, with the wing and breast meat markets taking the brunt of the losses. While the chicken markets are on the decline, shell egg prices have been rising as inventories remain tight. Shell eggs are now being shipped from foodservice channels to retail and should help stem the price rises in the egg markets. Still, egg inventories should remain tight moving forward.


Last week, cattle slaughter jumped sharply, reaching its best weekly level for March since 2000. Carcass weights remained well above a year ago making beef production last week the fourth largest for any week since 1993. While packers were taking advantage of stellar margins, beef prices have begun to decline as elevated output and tempered foodservice demand are increasing available beef supplies. The Choice boxed beef cutout fell sharply to begin this week and anticipate further losses ahead. The middle meats and fat trimmings markets continue to struggle relative to the already more retail oriented end cuts.



Pork production moderated last week, but remained historically large, up 9.3% from the year prior. While the retail pork cuts garnered much interest following consumer-based panic buying, the bellies and more seasonal ham markets continued to struggle. The USDA pork cutout is down sharply this week, and it’s looking like the retail pipelines are full and unable to accommodate any additional foodservice pork supplies. Export interest will be a pivotal part of keeping pork production levels current and prices from plummeting further.





The snow crab markets are anticipating the Canadian fishing season. Expectations are that the Newfoundland snow crab quota could be bumped modestly higher from the prior year but still remain historically low. No major improvement is expected with the Gulf of St. Lawrence quota either. However, seafood demand is suffering due to food service operation challenges and are likely to weigh on the snow crab markets this spring.






Lettuce supplies remain limited due to adverse weather. Iceberg lettuce shipments last week fell 23% from the prior week and were 34% less than the same week last year. Usually a decline in shipments of this size would have lettuce prices soaring but slack demand in foodservice is tempering prices. History suggests that the downside price risk in the iceberg lettuce market is limited from here but look for prices to remain depressed in the near term. Similar story for avocados and potatoes as a large part of consumption occurs at food service. Avocado and potato prices are on the decline.






The cheese block and cheese barrel markets this week are the lowest in 15 months and 14 months respectively. After an initial boost for cheese demand from the retail sector (from COVID-19), prices are now falling sharply due to the reduced food service needs. That said, CME cheese futures for H2 of this year are engaging. The spot butter market continues to trend sharply lower and is the cheapest since January 2015. Big butter stocks and fading food service demand are influencing prices lower. But, CME butter futures for H2 of 2020 are attractive. Expect the dairy markets to remain volatile.




The wheat markets have found support during the last week. Due in part to the rising value of the U.S. dollar, wheat prices in Russia have risen to a record high and the country is reported to be considering export restrictions. This could cause some market volatility during the next several months.







Nearby WTI crude oil futures this week are the lowest in 18 years. Obviously, COVID-19 has hampered petroleum demand big time (travel). It wouldn’t be a shock to see some production cuts soon which would bring support to oil prices.