Alerts & What’s Trending
- How Businesses Can Weather COVID-19: Start with Empathy to Employees
- April Unemployment Rate Highest Since Great Depression
- More States Lift Coronavirus-Related Dine-In Restrictions With Social Distancing and Limits on Capacity
- 24 Attorneys General Urge Congress To Fix Broken Paycheck Protection Program
- Reopening Operator Support Center
The tomato markets have remained inflated during the last week due in part to shortened harvests out of Florida and Mexico. The chief harvest areas will shift northward in the coming weeks with no major supply gaps anticipated at this time. History suggests that the transition can be accompanied with higher prices. However, in years when tomato prices were inflated at the beginning of May, like this year, the following weeks were accompanied with price declines. Potato demand is improving as food service comes back online. Further price increases in the potato markets may be impending.
Ethanol producers have been hurt badly by the lack of gasoline demand and lower crude oil prices. Ethanol output, as a result, has slowed considerably lessening the demand for corn. Although ethanol production is starting to slowly improve, smaller corn usage may temper any pending upside in corn prices.
Last week cheese block and cheese barrel prices had their highest weekly closes in six weeks. Better demand due in part to improving restaurant operations and retail rebuying are supporting prices. Spot cheese prices likely set a long-term bottom at $1.00/lb. last month but price gains from here are only expected to be modest. The spot butter market last week had its highest weekly settlement in five weeks. Like cheese, spot butter prices in April probably set a long-term bottom at $1.100/lb. Solid retail butter demand and inventory building could support prices further, but notable inflation isn’t anticipated.
Beef production remains weak relative to year ago levels. But on a positive note, output last week increased from the week prior. Further, cattle harvests look to be heading over the 500k head mark this week, and a move back over 600k head is expected by early June. Still, beef prices continue to rise, and there may be at least another week to two weeks of historically high prices before notably lower prices materialize. The fat trim markets remain one of the biggest movers in the beef complex, with high side trade moving over the $3.00 mark late last week. Trim prices may not see much relief in the near-term.
Pork production last week rebounded going into May, up 15.7% from the week prior but was down 23.7% from year ago levels. Pork prices have been on the rise, with bellies nearing the $2.00 price level closing out last week. Growing concerns are present regarding tight pork supplies, but production is finally improving. So, expect this week to see backfilling needs to fill holes in recent orders. Still, pork export interest remains robust and some production may be allocated to service existing export demand, particularly from China and Mexico.
For the week ending May 2nd, total chicken slaughter came in at its highest level since early April but remained 1.3% below a year ago. While bird weights were up, seasonally, weights fell below year ago levels, and left RTC production 1.6% less than last year. While recent smaller broiler output has underpinned prices, the upside action has been mostly limited in comparison to the other meat proteins. Still, recent chick placement data suggests that tighter production is expected in the weeks ahead. Recently, with restaurant demand coming back online, wing prices have been on the rise, with breast meat finding further support as well. So, anticipate higher chicken pricing ahead.
The shrimp markets are mixed. Shrimp demand has fared better than other seafood products at retail. Imports have remained solid. U.S. shrimp imports during March were 6.1% larger than last year despite the interruptions in the world shrimp supply chain. U.S. shrimp imports are expected to improve in the coming months. This factor along with just slowly recovering food service demand is likely to weigh on the shrimp markets into the summer.
After hitting the lowest level on record last month, nearby WTI crude futures last week finished the highest in five weeks. As the U.S. economy improves it should boost crude oil demand. But crude oil and petroleum prices are still historically cheap.