The Dish Market Report, September 8, 2020

top of mind news

Total chicken slaughter for the week ending August 29th fell from both the week and year prior.  Heavier bird weights have persisted, but ready-to-cook broiler production was down 3.4% (y/y).  Price strength remains with chicken wings, with last week averages creeping into the $2.08 price area. Tender prices, as well, continue to hold strength but breast meat and the dark meat price categories have been fading.  Lower breast meat prices are largely expected as grilling season comes to an end, but the downside across the leg quarter markets remains aggressive.  Chicken production may remain modest, at best this fall, and this could continue to support the chicken wing and tender markets.


Packers slowed weekend harvests ahead of the Labor Day holiday, leaving total beef production last week down 3.2% (w/w), but was 13.1% larger than the prior year’s holiday week.  Beef prices have been fading, seasonally, throughout early September, and expectations remain for additional downside ahead.  Still, active features for the holiday week are likely to keep demand robust in the near term as fill in buying emerges.  The beef 50s are holding in the lower $0.40s, and, while interest typically wanes into the early fall, much additional downside price potential beyond the $0.40 mark is not anticipated.



Pork production last week fell 6.4% (w/w) but was still much better than the same holiday week last year. Volatility remains across the pork cutout items, with the hams experiencing the widest swings.  Bellies have, also been erratic moving counter seasonally higher during this late summer. While you should expect mostly sideways trade in the $1.00 to $1.10 price area, bellies have moved out to the $1.20 area, and are the highest since May.  Higher belly prices aren’t likely to last, but there is a seasonal pull on bacon in October, the unofficial pork month.





The salmon markets continue to trade at relatively engaging levels due in part to lackluster foodservice demand.  U.S. salmon imports during July were 6.6% better than prior year with imports of farmed filets higher by 15.5% (y/y).  Fairly solid U.S. salmon imports are anticipated to persist this fall.  The salmon markets are expected to remain below year ago price levels into the winter.






The avocado markets are tracking near year ago levels.  Imports from Mexico have been strong while imports from Peru have tracked below last year. History suggests that lower avocado markets could be forthcoming.  The five-year average trend for the 48 count Hass avocado market from this week through the end of the year is a decline of 33%.  The fall potato harvest continues to progress influencing most of the potato markets lower.  The harvest in Idaho remains in the beginning stages at just 7% complete as of August 31st.






The cheese markets increased last week (w/w).  The spot butter market was mostly unchanged but remains the cheapest for this time of year since 2013.  July domestic cheese exports were up 5.4% (y/y) but were the smallest since April.  July U.S. butter exports were 111% larger than the prior year and were the second best for the month in five years.  U.S. government food box commitments are boosting cheese prices but are not projected to be as big as seen earlier this summer.  Cheese prices may still rise in the near term but are likely to seasonally fade this fall.  Some butter contracting can be considered.




The wheat markets have been erratic during the last several weeks with low-protein products trading consistently above the higher-protein types.  Low-protein wheat supplies are in a much tighter position causing the irregular spreads.  Still, a bigger Russian wheat crop could temper any further upside in the domestic wheat markets.







Last week nearby crude oil futures fell 7.2% (w/w) and experienced the lowest weekly settlement in 10 weeks.  Despite recovering crude oil demand for petroleum products, pre-Covid pandemic usage has not been achieved.  Nearby crude oil futures look poised to decline further but there is support at $36.25/bbl.