December 2023 Market Update

With beef prices remaining at elevated levels, consumer demand has fallen short of the packer’s expectations so there will be an adequate supply of beef for the upcoming holiday season. Beef supplies have improved to the point where packers have increased slaughters and added Saturday shifts to process the backlog of cattle.

Despite beef supplies exceeding expectations, prices will remain high for the rest of the year due to short-term increased holiday demand. With drought conditions being an ongoing concern for ranchers, the herd rebuild has yet to begin. High interest rates have also dissuaded beef producers from investing in the expansion of their herds.

Demand for beef remains strong as consumers have not traded down to lower cost proteins such as pork and chicken. Availability of premium (CAB, SS, & PSA) grade beef remains adequate to meet holiday demand as lower grain prices have resulted in cattle being kept on feed longer.

• Ribeye pricing will be trending higher due to the normal seasonal holiday increase in demand.
• Striploin pricing has increased primarily due to retailers featuring striploins as a lower cost alternative roast item compared to prime rib.
• Chuck flat pricing will be increasing again due to increased demand both domestically and overseas. Despite export sales to Asia being down, both Japan and Korea have moved more prominently towards chuck flats instead of boneless chuck ribs & boneless chuck short ribs which are priced at excessive high levels.
• Chuck Roll pricing will be decreasing towards the end of the month as retailers shift to ribeyes for their holiday ad features.
• Sliced beef short rib pricing is stable for the time being but is under pressure due to limited availability.
• Oxtail prices are steady for now but could possibly increase further as we enter the colder winter months in many parts of the country.

As we head into 2024, we anticipate continued volatility in this choppy market. By choppy we mean that prices will fluctuate as consumers react to the elevated price levels for beef.

Despite the ongoing cattle shortage we do expect there to be adequate supply to meet existing demand, however we should expect continued higher prices.

Despite the reemergence of HPAI bird flu cases across many parts of the country, there is a more than an adequate supply of chicken relative to demand. In comparison to high beef prices, chicken remains reasonably priced and a great value for consumers. With the upcoming back-to-back Christmas and New Year holiday weeks we do expect prices to increase slightly due to the short kill weeks.

• Bone-In Thighs – Availability for Bone-In Thighs is good as virtually all the major packers have inventory to offer. Pricing has increased recently but remains at reasonable levels.
• Boneless Skinless Thighs – Boneless Skinless Thigh prices have stabilized at lower price levels and are close to the bottom of the market.
• Leg Meat – Chicken leg meat prices have been volatile as the industry has not reached a level acceptable to both packers and consumers.
• Breast Meat – Breast Meat prices remain stagnant as packers remain reluctant to lower prices further.
• Wings – Wing prices, which did increase at the start of the football season, have started to decrease as all major players have their needs filled.
• Turkey – The HPAI bird flu has started to impact turkey flocks more significantly, however available supplies still outpace consumer demand.

The resurgence of the HPAI bird flu is a concern for both the short-term and long-term impacts. For 2024, consumers could see a positive impact with lower prices should key export markets ban U.S. poultry from affected areas.

As with the poultry industry, the supply of pork far exceeds demand. Despite Smithfield cutting back on their sows, we have yet to see any negative impact on the overall supply of pork.

With pork supplies more than adequate to meet current demand, prices are expected to remain stable heading into 2024.  

• Butts – Despite strong export demand to Mexico and Japan, boneless butt prices remain steady primarily due to the excess supply of hogs.
• Back Ribs – Rib prices are stable and should remain steady as we enter 2024.
• Hams – Unlike most other pork parts, ham demand has been resilient and remains one of the few profitable areas for packers. Ham prices have held steady but are under pressure once we are past the holidays.

Packers continue to deal with lukewarm demand coupled with an abundant supply. As we head into 2024, pork producers remain challenged to reach profitability with many in the red.   

Alaskan King Crab

• The Alaskan Bering Sea Red King Crab Season has completed the catch of their quota.
• The Reds will be priced at premium levels. Golds will be holding at their current levels with not much movement in pricing due to the lack of Red supply.
• The Gold King Crab Fishery is still crabbing with a 5-million-pound TAC (Total Allowable Catch).

Cold Water Atlantic Lobster Tails

• The main Canadian Season was supposed to start on November 27th but was delayed until December 2nd with poor results so far.
• Southwest Nova Scotia is reporting below average catches for both inshore and offshore. Most of the catch is being sold live to Asia. Prices for inventory from last year’s catch have been increasing every week.
• 3/4 oz., 4 oz. and 4/5 oz. tails are under pressure from retail and large chain restaurants running them as specials during the Holiday Season.

Mahi Mahi

• We are still feeling the effects of an El Nino year leading to warmer than normal currents in the Pacific Ocean. The colder currents that normally run closer to shore in North and South America are moving further offshore, forcing the bait that the Mahi feed on to move farther away as they follow their food (Plankton).
• South America has started their season and has yet to find the schools of large fish. Reports are coming in that the schools have moved further south than normal. Fishermen must weigh the option of spending more money for fuel and other expenses to chase the Mahi further as well as consider the effect on the quality and integrity of fish once they are caught. It will take the boats longer to return to port to process the fish.
• There will be a shortage of large (7/up) fillets soon. Prepare to see 5/7 fillets as the most available.

Vanamei White Shrimp – Pierport

• Prices remain stable for all sizes and types.
• The United States is launching an investigation into the low prices of imported shrimp from Ecuador, India, Indonesia, and Vietnam and the resulting loss of sales for the domestic shrimp industry. At this point, it is just an investigation into how much loss was suffered and when and what kind of percentage of tariff needs to be proposed.

Tuna – Jana Brands

• There is an abundance of raw materials at this time. We have a comfortable inventory of Poke Cubes, Mini Diced, Ground, and Saku Blocks.