Butter Takes Off

Beef production continues restrained to keep prices up and packer losses as small as possible. 516K head produced last week, same as the previous week. Heading into spring this is keeping the beef supply tight and prices supported. We have the smallest beef herd since 1951 when there were half as many people in the country. That is not turning around anytime soon. Regarding current market prices, everything is going up. Ribeyes and strip loins will be leading prices higher for the next few weeks. Grind demand is strong and prices moving up as well. Chuck had a nice few weeks of declines, that is over, rounds never lost support and continue to move higher. I do think middle meats and thin meats, flanks, skirts, sirloin flap, will all be tight and expensive, already looking at Cinco de Mayo. We are at the start of a steady move higher, I’d advise buy sooner, rather than later, waiting will cost you money. Keep well ahead of your needs, this market is going to be expensive and tight.

Poultry production continues to run about 2% ahead of last year. Demand is good, production is strong, pricing is holding up, though wings declined a second week in a row. Boneless skinless breasts and tenders… holding steady. It’s a good time to menu chicken. On the Avian flu front, its ugly. 23 new cases reported in the last week affecting 4.8Millioin birds, 4 million of those birds were egg layers. I’m not feeling good about spring migration.

Soy markets continue to climb. Its been so long since we’ve seen a bull market in soy. Soy oil and canola oil, both moving higher with good export demand and higher biofuel usage. We may see this plateau in the next couple weeks, but right now, soy is on a tear. Corn and wheat… not so much . Still trading sideways and I don’t see that changing.

Pork bellies continue to march higher, today’s close $153 up from last week $148. I don’t think we are done by any stretch. Bacon will be going up. Contrary to rest of the pork complex, plenty of inventory, prices are good. Yes, menu pork.

Butter took a huge run up this week. Thru Thursday’s close on the CME butter is up 24! That’s a big move. Barrel and block both up 3 but butter is the big mover. We’ll see if the markets hold these recent gains, but for now all signs point to a higher dairy costs.

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