Chicken & Turkey Situation (Urner Barry)

Despite the best of intentions and reasonably solid character, the chicken industry is struggling mightily to get out from under the cloud that seems to be following it wherever it goes.

Chicken Situation

There is no doubt that the product being supplied is globally pursued and appreciated once in hand, but the process is leaving quite a bit to be desired from a seller standpoint, given the high degree of competition and burdensome production levels hitting the street. This has created a highly cost conscience environment where the various industry participants are forced to compete at a level they would rather not.

Here at midweek, and despite some acknowledged discounting taking place where deemed necessary, graded chickens as well as wogs continue to move with relative ease and at supported prices into retail and cut up operations. All in all, consumer demand is good, the price is “right”, and a largely hands-off scenario is in play. Input received since late yesterday finds breasts and fronts seemingly in a marginally improved position. Granted, fronts are not necessarily pursued aggressively, but some buyers such as the U.S. export partner to our north, are playing a larger role in absorbing them and the undertone is taken up a notch as a result.

The front half items are about where they were at day’s end on Tuesday. Offerings of all boneless lines, whether whole muscle, trim, or chunk, are adequate to ample. One point of discrepancy during our canvassing involves breast trim where source experiences vary enough to force us to make additional discovery inroads before making any price determinations. However, that is pretty much where it ends. Transactions data, market data or plain old sentiment has most wings, all breast meat, and tenders in a barely steady to weak position where good demand isn’t sufficient to absorb fully adequate to ample offerings. The seller recourse is as expected with some clearly adopting a “first sale is your best sale” stance. In the end, and despite being favorably positioned as compared to some of the competing beef and pork offerings, increasing supply in conjunction with seasonal demand and previously high or record setting market values, is serving to force the complex into a major adjustment.

As we mentioned yesterday afternoon, it is difficult to find any input, transactional or market, which might sway undertones into more upbeat territory. Much like the front half, but additionally pressured due to HPAI oriented trade restrictions and influences like a strong dollar and sharp inflation, all back half bone-in and boneless lines are displaying varying degrees of weakness. The obvious exception is bone in thighs, where we note an expanded level of interest from domestic buyers who report that supplies are not what they had expected to see and verge on being short of needs. Otherwise, and without exception, the balance of bone in and boneless dark meat lines deserve a barely steady to weak undertone.

Turkey Situation

Any hope that HPAI would only minimally impact the industry this Fall has been all but dashed recently as a spurt of detections across the country have many within the industry proceeding cautiously. Repopulation efforts and hope for more fruitful availability in 2023 have been stunted, as flock losses in both breeder and meat birds are beginning to add up. As for the market itself, new and different transactional input was minimal late yesterday and into this morning and our quotations adjustments follow suit.

If you’re looking for a bright spot as a seller, whole turkeys certainly qualify. Demand continues to be stout as last-minute seasonal needs come into view. Ask prices generally sit at or slightly above what’s listed on our price sheet. All sizes remain in a full steady to firm territory. Consumer and institutional-sized breasts are in solid standing as well, but premium level interest has been minimal recently due to the all-time high values associated with any extra availability.

Turning to parts, ongoing smoking and grinding demand for drums and whole wings keep supplies well cleared and held with confidence. Two joints, as well as necks, tails, and gizzards, continue to see lackluster demand as export buyers show little interest at the current level of ask prices. This is assuming export capability is still in play as many sellers deal with trade bans related to disease. Hearts and livers are feeling some pressure as well due to buyers finding cheaper alternatives.

The raw materials segment remains well supported overall. Ask prices continue to hover at full market levels for breast meat, tenders, and scapula but buyer willingness to pay higher has slowed some as seasonal demand wanes. Thigh meat is mostly steady but has some noting difficulty in attaining flat sheet values. Frozen MST has begun to shift lower as hot dog demand dwindles. Fresh is beginning to see some scattered pressure as well.

Par: Russ Whitman (Chicken) et Matt Busardo (Turkey) (21/09/2022)

Source: Foodmarket newsletter (Urner Barry)