Wages, Input Costs & Supply Chain Problems Pushing Up Pork Prices, Not Profits

In a report issued today on retail pork prices economists with Iowa State University, North Carolina State University and the National Pork Producers Council found that pork prices, not industry profits, are rising. Prices are rising due to increased transportation costs, supply bottlenecks and delays and increased labor costs throughout the pork chain. Those factors, said Iowa State’s Dermot Hayes, NC State’s Barry Goodwin and NPPC’s Holly Cook, were either caused or exacerbated by the COVID-19 pandemic.

Other factors that have affected prices up and down the...

ANALYSIS: Weekly Chicken Production Stats Exhibit Uncommon YoY Decline

Reflecting back over the past year, chicken production has been anything but uniform...

ANALYSIS: The Ebb and Flow of YoY Chicken Production

So far, 2021 has been a long and drawn-out year for those in the chicken industry...

Beef Quarterly Q3 2021: Déjà Vu Argentina

In May this year, the Argentine government imposed a 30-day suspension on beef exports. After those 30 days, new limitations were placed on the volume and type of beef that could be exported. In our feature article, we look at what impact this will have on the Argentine beef industry and the global market.

Covid-19

Global confirmed case numbers began rising again in mid-June, after falling from a peak in late April. Numbers in Europe, the Eastern Mediterranean region, Africa, and the Western Pacific region have seen large rises. Food retail figures remain strong, and foodservice sales were still...

ANALYSIS: Jumbo Chicken Wings: A Countdown to the Coin Toss

With the first kickoff of college football season practically at our doorstep, the topic of chicken wings has begun to weave its way into market related conversations.

ANALYSIS: Turkey Raw Materials Continuing to Ride Updraft

Following last year’s lack of seasonal underpinnings, marketers on the raw material side of the business are breathing a collective sigh of relief thanks in large part to what has, so far, amounted to be stout performance for whole muscle white meats and the related trim lines...

ANALYSIS: Chicken Cold Storage: Break out the Broom

Chicken marketers are breaking out the figurative brooms as they search for any additional supplies left in the freezers...

Pilgrim’s Pride Reports Second Quarter 2021 Results with Growth in Sales

Pilgrim’s Pride Corporation reported its second quarter 2021 financial results.

Second Quarter Highlights

- Net Sales of $3.64 billion, up 29% from prior year.
- Consolidated GAAP Operating Income margin of (3.4)% with GAAP Operating Income margins of (10.0)% in U.S., 17.5% in Mexico and 2.3% in Europe. Adjusted U.S. Operating Income margin of 7.8%.
- GAAP Net Loss of $(166.7) million. Adjusted Net Income of $153.8 million or adjusted EPS of $0.63.
- Adjusted EBITDA of $371.6 million, or...

Pork Quarterly Q3 2021: Looking for Growth Amid Uncertainties

Great volatility in Chinese hog and pork prices is rippling through the global market. China’s slaughter rates were unexpectedly high in Q2, pushing pork production up 35.9% YOY in 1H, according to official data. The sudden supply increase resulted in a sharp price decline and negative results in both farming and trading in 1H, pointing to low pork imports into China in Q3. While we expect hog and pork prices to rebound in Q3, the estimated high frozen pork inventory will impose a lot of downward pressure on prices. We expect the slowdown of imports in the coming months will reduce full year imports from 2020’s record levels by 10% to 20%. This will lead to a redistribution of pork trade in the global market and could place downward pressure on pork prices in exporting regions.

ANALYSIS: Frozen Turkeys Steal The Seasonal Show

It’s no secret that the majority of turkey lines are continuing to enjoy a strong showing here in early Q3. While recent market dialogue and trade activity has unquestionably gravitated towards...

ANALYSIS: Turkey Thigh Meat and Pork Ham Quotations Reaching an Inflection Point?

With Q3 in full swing, further processors, especially those who reside south of the border, are paying particularly close attention to the price relationship between boneless pork hams and turkey thigh meat...

ANALYSIS: Jumbo and Select Breast Meat Values Shake Traditional Price Relationship

Over the years, close attention has been paid to the price differential between jumbo boneless breasts and select...

Beef Quarterly Q2 2021: Record Prices, but Will They Last?

Many key beef production and consumption areas across the world are currently experiencing high or record prices for beef or cattle. We explore what is driving this and whether it will last. There are also several other issues affecting global beef markets at present.

Covid-19

The rollout of vaccines, the transition to robust economic growth, and the advance of the northern hemisphere summer see many areas experiencing lower Covid case numbers and higher economic activity. With restrictions being eased, foodservice sales are also...

ANALYSIS: April Chicken Cold Storage Holdings: A Continuation of a Familiar Trend

Several months ago, we assessed the near universal downturn in cold storage holdings exhibited by key lines within the chicken complex, and by the looks of the USDA’s most recent report...

ANALYSIS: Chicken Boneless Breasts and the Jumbo/Medium Spread

Since their inception to the Urner Barry price sheet back in late 2009, medium-sized boneless breast quotations have...

ANALYSIS: A Critical Eye on Chicken Slaughter

Despite predictable seasonal advancements in demand from all traditional channels, the chicken trade environment remains anything but “normal” in the eyes of most players... 

ANALYSIS: Cash Hog Pricing Surpasses Live Cattle Pricing

In an unusual turn of events, cash hog pricing is currently higher than not only the pork cutout, but live cattle prices...

Pork Quarterly Q2 2021: Production Setbacks Slow Growth, Boosting Prices and Returns

Global hog prices are sharply higher in most markets, as processors scramble to find adequate supplies. Higher disease losses in key growing regions, along with the lagged impact of industry liquidation during the pandemic, have limited available hog supplies. Rabobank expects a gradual recovery in the herd, yet higher raising costs and demand uncertainty are expected to moderate the pace of growth. Lower production expectations have left the market short of pork, just as demand is beginning to strengthen. The imbalance is driving pork prices sharply higher in many markets, which is slowly being passed through to consumers, contributing to overall inflationary trends.

China: Herd losses due to new ASF outbreaks and health challenges are slowing the recovery. While below earlier expectations, the sow herd is flat vs. 2020 and will expand through year-end as...

ANALYSIS: Chicken Hatchery: Rising from the Ashes, But is it Enough?

About a year ago, we published a broiler hatchery analysis titled: “Coping with Production Excess”, where we posed a question to our readers...

ANALYSIS: Will Chicken Ever Come Up For Air?

Fate has an interesting way of affecting the commodity markets. Chicken is arguably a frequent end beneficiary of "fate," both good and bad, and receives it in more volatile doses than...

ANALYSIS: Turkey Production and Cold Storage-As Goes One

In recent months, the turkey complex has experienced a surprising level of price volatility, most of which has pointed towards the upside...

ANALYSIS: Chicken Index Product of Unprecedented Market Influencers

Over the past year, there have been very few stones left unturned as the industry and observers of it have navigated their way through unprecedented times. Presently, the chicken market is experiencing...

ANALYSIS: WOGS--How Quickly We Forget

It’s no secret that the vast majority of key lines within the chicken complex have performed quite admirably throughout Q1...

CME Grain Markets Surge Following Friendly USDA Reports

Grain markets on the CME surged Wednesday following a wave of bullish USDA data in the latest Prospective Plantings and Grain Stocks reports. 

The annual Prospective Plantings report estimated corn planted area for all purposes in 2021 at 91.1 million acres, up less than 1 percent from 2020 and below the average of analysts’ expectations. Meanwhile, soybean planted area for 2021 was estimated at 87.6 million acres, up 5% from last year but below the average trade estimate at around 90.1 million acres. 

The quarterly Grain Stocks Report showed corn stocks at 7.70 billion bushels, down 3% from last year. Soybeans stored in all positions on March 1, 2021 totaled 1.56 billion bushels...

Poultry Quarterly Q2 2021: The Bumpy Road to Recovery

The outlook for the global poultry industry is gradually improving, but big differences remain between countries, and global poultry trade is still very competitive. The industry is facing major challenges due to Covid-19-related market disruption, very high and volatile feed prices, avian influenza (AI) in the northern hemisphere, and volatility coming from a bumpy recovery in countries affected by African swine fever (ASF). Key for producers will be to have a very disciplined supply growth, a focus on cost reduction via procurement, production efficiency, and feed formulation, as well as being prepared for big swings in demand driven by Covid-19-related government decisions.

As countries reopen foodservice, and while their control of Covid-19 improves, the poultry industry will start to recover. On average, 35% of global poultry consumption is via foodservice. “In countries where several of these disruptive factors come together, broiler prices have risen to high levels. Some governments have started to...

ANALYSIS: Frozen Tom Breast Meat Values Buck Seasonal Norm

It isn't every year that the topic of frozen tom breast meat catches the eye of market participants this early in the "season"...

ANALYSIS: MSC Enjoys Unseasonal Updraft in Value

It isn’t often that MSC takes the spotlight, especially so early in the year before seasonal springtime demand has a chance to fully develop, but...

ANALYSIS: Boneless Breasts: Searching for Seasonality

Most key lines within the chicken complex have performed quite admirably so far this year and jumbo boneless breasts are no exception...

COVID-19 Disruptions Create New Areas of Opportunity and Risk for the Poultry Industry 

Covid-19 is disrupting the business in ways the global poultry market had never planned for, creating new areas of opportunity and risk. The impacts of Covid-19 are spread very unevenly between regions and between companies.

“Company leaders and investors need to constantly review market conditions and adjust company positioning to optimize growth and returns. There will be bigger differences between winners and losers, which will lead to a process of accelerated capital investments, consolidation, and internationalization in the coming years,” according to Nan-Dirk Mulder, Senior Analyst – Animal Protein.

Rabobank has identified three stages of Covid-19’s impact on the global poultry industry...

ANALYSIS: Don’t Sleep on Chicken Leg Quarters

With chicken front half items continuing to be the talk of the town, it’s easy to overlook the slightly less exhilarating, albeit seasonally admirable, status of frozen leg quarters...

ANALYSIS: Boneless Chicken Breasts in the Crosshairs

One of the first things that any Econ student quickly gets acclimated with is how the quantity of a given commodity that manufacturers want to sell and the quantity of consumers who wish to buy, interact with one another...