top of mind news
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- Summer LTOs: 5 guiding principles to count on
- Restaurant Recruiters Work to Take the Headache Out of Hiring
- Better plant-based burgers find a place on the menu
Chicken production for the six-week period ending July 28th rose 1.3% from the prior year. During those same six-weeks, chicken slaughter averaged 1% more than 2017, and the average bird weight was heavier by .3%. The USDA is calling fall chicken output to be 2.1% better than last year. The chicken breast markets are at their least expensive levels for this time of year in 18 years. Still, chicken breast demand is expected to pick up and prices should appreciate moving towards the Labor Day holiday. However, history suggests that lower chicken breast prices will materialize thereafter. The chicken wing markets are the cheapest for this time of year since 2011. Wing prices are projected to firm into September with growing demand from football viewers.
Beef production last week was down 2% from the prior week and was 1.4% smaller than the same week last year. The July 1st total U.S. cattle herd was up 1% from 2017 and was the biggest since 2008. Yet, it was the smallest annual gain since 2014. Beef output for the second half of 2018 is expected to be 3.5% more than last year. Seasonal beef price gains this fall should be modest. Dry conditions in the southern plains are boosting cow slaughter. A drought is occurring in Australia which is fueling cow kill there also. This could boost lean beef trimming supplies in the near term. Since 2013, the average move for 90% beef trim prices in September and October was down 11.1%.
Pork output last week rose 16.6% and was 3.8% bigger than the same week last year. Seasonally rising hogs are likely to encourage pork production gains in the coming months. Pork output from July through December is forecasted to be 5.6% more than last year. Lower pork prices are expected through the Labor Day week. U.S. pork exports during June were 1.4% more than the previous year but the smallest since September. Exports to Mexico during the month were 3.8% less than 2017, and exports to China-Hong Kong were down 40.5%(y-o-y).
The Canadian snow crab fishing season is practically finished. As of August 5th, 97% of the Newfoundland snow crab quota had been landed. Sharply lower Newfoundland and Gulf of St. Lawrence quotas compared to previous years is causing supplies to remain tight. This factor is anticipated to support the snow crab leg markets during the next several months.
Iceberg lettuce prices continue to trade at relatively engaging levels. Iceberg shipments declined last week but were still slightly above year-ago levels. No major supply gaps are anticipated in the near term, but history suggests that the greater price risk in the lettuce markets from here is to the upside. The Idaho potato markets continue to track below 2017 levels due to ample supplies. Growing conditions in Idaho have been favorable which should equal adequate supplies with the new crop. Lower potato prices are likely to occur this fall.
The Kitchen Sink
U.S. milk production continues to trend above year-ago levels. During June, milk output was 1.2% larger than the previous year due to 1.2% rise in milk per cow yields and a slightly lower milk cow herd. Milk farmers kept the milk cow herd unchanged from the previous month. The milk cow herd remains historically large but may continue to modestly decline in the coming months due to subpar margins for farmers. Seasonally fading milk output is supporting cheese prices. But, U.S. cheese supplies are ample which could temper any further seasonal price increases this summer.
The wheat markets have continued to firm during the last week. The U.S. winter wheat harvest is in its final stages with 90% complete as of August 5th. However, world supply expectations are tightening due to challenging weather in Europe and Australia. This could support wheat prices in the near term.
Nearby RBOB gasoline futures have fallen over the last week and are pricing 11.4% below the 42-month high set in May. Still, the most recent average retail price is 17.7% higher than a year ago. Gasoline prices typically weaken this month.