The Dish Market Report, April 25, 2019

top of mind news

the farm


For the week ending April 18th, RTC (ready-to-cook) chicken production was up .6% from the previous week and was 1.3% more than the same week in 2018. For the six-week total ending April 18th, RTC chicken output was better by 1.3% compared to last year.  Lower feed costs are helping chicken producer margins and should boost output. Grilling season is near which typically supports chicken breast prices. Over the last five years, the average move for the ArrowStream Chicken Breast Index (USDA) during the next three weeks was up 6.3%. History says that lower chicken wing prices can still occur in the near-term, but they usually bottom for the year during mid-May.



Last week, domestic beef production was up .2% from the prior week and was 1.9% more than a year ago. Beef demand continues to be respectable. Retail beef prices during March were up .8% from February, were 1.2% costlier than a year ago and the highest for the month since 2016. Springtime grilling activity will pick up soon which typically supports the various beef trim markets. Since 2014, the average move for the wholesale 81/19 ground beef market during the next five weeks was up 9.4%. But, this year’s seasonal rise for 81/19 ground beef may be tempered due to current prices already being up 18.5% (yoy).



Pork output last week was .1% less than the prior week and down 1.8% from a year ago. The USDA pork cutout value is holding above year ago levels due partly to a growing concern of tightening global supplies due to African Swine Fever. Per the USDA, March 31st total pork supplies were .2% smaller than a year ago and belly stocks were down .7% versus the prior year. Pork belly prices have fallen modestly recently but usually find support soon. Over the last five years, the average move for the pork belly cutout from May through mid-July was up 63%.



The Sea


Salmon prices continue to track above 2018 levels.  U.S. salmon imports in February were up .3% year-over-year and Atlantic salmon filet imports were better by 3.3% versus 2018.  The firm U.S. dollar is likely to persist and should encourage salmon imports over the next few months. This may temper seasonal salmon price gains that usually occur during the summer.



The Garden


The Idaho potato markets are modestly higher than a year ago. U.S. potato stocks on April 1st were up 3.1% from the previous year. Idaho potato inventories were better by 7.7% compared to 2018.  Since 2014, the average price move for Idaho potatoes during the next seven weeks was up 22.5%. The lettuce and tomato crops will be transitioning northward in the East and the West which sometimes causes supply gaps.  Over the last five years, the average move for large fresh tomato prices from early-May through mid-June was up 72.7%.



The kitchen sink


The CME cheese markets have remained steady but are up roughly 20% in 2019. Per the USDA, March 31st domestic cheese inventories were 4.3% higher than a year ago and were a record for any month. Despite increasing seasonal cheese demand, inflated stocks and strong production should limit further cheese price gains this summer.  The spot butter market remains content pricing near $2.250 lb. March 31st butter stocks were 11% higher than February but down 1.4% from the previous year. History suggests that butter prices should experience modest gains in the coming weeks.



Nearby soybean futures have fallen sharply in the last week and are pricing at the lowest level since November. As African Swine Fever continues in China, it is equaling less need for soybeans from that country. Even if a trade deal materializes between the U.S. and China, it appears that soybean prices may still have a tough time increasing.




Nearby CME natural gas futures this past week hit the lowest level since June 2016. More temperate weather is allowing natural gas inventories to build following a cold winter for the Midwest. Despite tighter natural gas stocks than a year ago, strong U.S. production could push prices even lower in the near-term.