February 2024 Market Update

2024 is already proving to be a challenging year for the beef industry due to diminished cattle supplies and higher prices. Ranchers remain wary of persistent severe weather and drought conditions in many parts of the Midwest. Additionally, high input costs and increasing interest rates have also contributed to beef producer’s reluctance to expand the herd.

Ranchers have been holding firm on their asking prices, so beef packers are having to pay more to secure cattle. With higher raw material costs and sluggish demand, packers have been cutting hours at the plants.

With ranchers keeping cattle on feed longer, grading has improved for choice, premium, and prime. On the other end of the spectrum, we are seeing reduced availability for the lower grades such as select.

• Ribeye pricing has returned to more reasonable levels but remains at historically high levels.
• Striploin pricing remains robust as retailers continue to feature striploins as a lower cost cut steak alternative.
• Chuck flat pricing will be increasing again this month primarily due to the high cost of cattle and packers being in a strong forward sold position for all grades of chuck flats. However, pricing will be decreasing in March as there has been strong push back to the high prices from both domestic and international buyers.
• Chuck roll pricing has remained at elevated levels as retailers have been featuring end cuts as a lower cost alternative to middle meats.
• Sliced beef short rib pricing will be increasing this month due to limited availability.
• Oxtail prices will be increasing due to increased demand during the winter months.

With the tight cattle supply we should expect continued higher prices. What remains to be seen is how cost-conscious consumers react to these high beef prices and possibly trade down to lower cost proteins.

With beef prices at elevated levels, retailers have been featuring chicken more prominently as they look to present value to consumers. With poultry being the predominant protein of choice, prices have increased for all chicken parts.

Unlike the summer of 2023 where prices skyrocketed to extraordinary levels, prices have increased much more gradually. The HPAI bird flu has resurfaced in many parts of the country but there remains a sufficient supply of chicken relative to demand.

• Bone-In Thighs – Availability for Bone-In Thighs has tightened considerably as retailers have stepped in to secure inventory for their ad features.
• Boneless Skinless Thighs – Boneless Skinless Thighs have emerged as one of the more coveted chicken parts. Pricing has increased but just securing inventory remains the primary challenge.
• Leg Meat – Chicken leg meat has seen increased demand domestically with buyers having to pay higher prices to secure inventory.
• Breast Meat – Breast Meat prices have also been increasing with retailers featuring this more prominently in their ads.
• Wings – Wing demand has been exceptionally strong and counter-seasonal to the historical trend. As with other chicken parts, retailers have stepped in heavily with wings hard to come by.
• Turkey – The HPAI bird flu remains an area of concern, however available supplies still outpace demand.

Poultry Outlook – Overall poultry demand and prices are up as all chicken parts are in a strong forward sold positions.

Unlike poultry, pork demand has yet to take off but that could soon change as retailers look to feature lower cost protein alternatives to beef. With there being a surplus of hogs in the supply chain, pork producers remain challenged to reach profitability.

Overall pork prices are steady for now but could increase should retailers step in to book products for future ads.

• Butts – Boneless butt prices have been steady but are starting to increase primarily due to strong export demand to Korea.
• Back Ribs – Rib prices are stable but are poised to increase once the weather warms up and people look to gather for backyard BBQs.
• Bellies – Belly prices have rebounded and helped to support the pork cutout.
• Hams – Unlike most other pork parts, ham demand continues to be resilient and remains one of the few profitable areas for packers.

Pork Outlook – With pork prices being at attractive levels, what remains to be seen is when retailers step in to feature pork more prominently in their ad features. Although increased retail activity will lead to increased pricing this will help pork producers and packers become more profitable.

Alaskan King Crab

• The Gold King Crab season is finished. Most quotas have been caught and product is being sent out for processing. The next season for Gold will begin in August, product should be available sometime in September.
• Currently, small Gold King Crab 16/20 and 20/24 are hard to come by.
• Sothern King Crab (Santolla) is the next viable option as replacement. The largest size currently available is 20/24.

Cold Water Atlantic Lobster Tails

• The current Canadian Season continues to experience reduced landings.
• Shore prices are very strong, and majority of the landings continues to go to the live market in China.
• The Large Canadian Season will start on May 1st.

Mahi Mahi

• The South American catch is still experiencing a lack of large fish. Predominate size coming in is 5/7 fillets.
• There will be some price weakness on 2/4 oz. mahi portions on the next batch coming in. ETA will be sometime in early May.

Vanamei White Shrimp – Pierport

• US Government is investigating whether to levy Tariffs on Ecuador, Indonesia, Vietnam, and India. The full investigations should be completed in the fall 2024. If validated, retro tariffs would start from mid-February 2024.
• Reports estimate the tariff range could be from 111% for Ecuador to 37% for Indonesia.
• Prices remain stable for most sizes and types. There were a few larger EZ Peels and U/15 PDTO that went up a little this week.
• Pieport will be eliminating Indonesia as a source of raw materials – limiting sourcing to India, Vietnam, and Ecuador.
• We are transitioning to BAP 4 Star in the Spring 2024 – product should be available in the summer.

Tuna – Jana Brands

• Supply is good and prices are steady.
• We have a comfortable inventory of Poke Cubes, Mini Diced, Ground, and Saku Blocks.