GERMANY, Frankfurt. The week ending July 19 was the second of eight non-holiday weeks between Independence Day and Labor Day. Over the past two months, everyday demand had been experiencing week to week erosion as consumers started reengaging with foodservice. However, the rising number of cases of Covid-19 around the country prompted many states to roll back at least some of the previously relaxed social distancing measures.
For the week of July 19, the elevated everyday demand resulted in a 23.4% increase in dollar sales versus year ago for the meat department. This is two percentage points higher than the prior week and the highest gain since late May. This also became the 18th week of double-digit gains since the onset of the pandemic.
Christine McCracken, Executive Director Food & Agribusiness for Rabobank, is reporting postive production results. “This week's cattle harvest was relatively flat with year-ago levels, with total beef production up 2.2% on heavier cattle weights. The USDA Inventory report released Friday shows a slight drop in on-feed supplies versus year-ago, but ample supplies to harvest in coming months. Retail beef interest has been slow and likely reflects higher shelf prices (lower discounting) and adequate inventories. With sluggish white table cloth sales, stimulus funds about to expire and high unemployment, we expect total beef demand to remain under some pressure. Pork markets remain surprisingly strong with prices up 2.6% versus last week, despite record production. Pork supplies are now 11.8% larger than year-ago, which continues to limit any additional improvement in composite values. Hog harvest for the week was up 9.7% from year-ago levels and 2.8% above last week. Ongoing labor issues have not interfered with the number of animals heading into the plant, but continue to inhibit further processing and deboning activities. Domestic pork demand remains sluggish with loins and bellies relatively weak, but export interest has been good. Mexico and Canada were active buyers and this should be supportive to prices in coming weeks. Chicken production continue to reflect cuts taken in the midst of Covid-19 disruption this spring, with RTC production down 5.2% versus year-ago on a 4.2% drop in slaughter."
McCracken also provided an updated on pricing. “Despite the drop in production, chicken prices moved lower again - down 7% from last week - as ongoing weak exports continues to erode dark meat values. The slowdown in exports has left sizable inventories of thighs and drums for US markets to clear. Good foodservice sales and improving promotional activity at retail are helping support boneless breast, wing and tender values, but improvements have been unable to offset historically low dark meat values. Wing demand remains robust, with steady demand at foodservice moving good volumes.”