Extreme Heat and its Impact on Protein Demand

This week in retail, we'll take a look at the widespread heat across most of the country and its impact on protein demand.

With excessive heat warnings currently in effect for more than 100 million people, consumers will be less likely to cook. This could potentially reduce retail meat sales, which normally slow around this time of year due to seasonal factors including a lack of major holidays following Independence Day until Labor Day.

While the extreme weather could have a negative near-term impact on meat sales, demand for pork and beef appears to be outperforming seasonal expectations.

Pork cutout values are staging an unusual rally post-July 4th, boosted by tight hog supplies and strong domestic demand overall. Urner Barry's pork cutout value closed at about $123.00/cwt Wednesday afternoon, up about 14% since Independence Day.

Pork is a stark competitor against other proteins in the meat case. Ribs are priced at an average of $3.87 per pound and chops are featured at $3.17 per pound. While the rest of the retail pork complex boasts competitively low prices, bacon prices have been elevated in record territory throughout 2022 so far.

Brand label bacon is currently featured at an average of $6.40, up 13.5% from a year ago. The all-time high was hit the week of April 25th at $7.08 per pound. Bacon is currently in its peak demand period as consumers indulge in summertime favorites including bacon, lettuce, and tomato sandwiches.

Boneless skinless chicken breasts average $5.19 per pound, this week, up about 57% from a year ago. Chicken breasts are featured at the highest price points within the chicken parts complex.

Over in beef, steaks average $8.60 per pound, down 2.8% from a year ago but a comparatively pricey grilling cut option. However, bottom round averages $4.99 per pound, making it a viable competitor with other lower-priced protein options.

Contrary to seasonal norms, the boxed beef market is displaying bullish undertones with support seen from limited spot availability and strong exports. Urner Barry's Choice quotation is situated at near seasonal all-time highs, second only to 2021—which was heavily influenced by pandemic-related factors.

Looking at the protein retail complex as a whole, beef ads continue to be priced at a premium to chicken and pork. Urner Barry’s retail index for pork this week is $4.42 per pound, while chicken is $3.41 per pound. The seafood retail index is the highest at $9.73 per pound, while beef follows with $7.00 per pound.

Par : Courtney Shum (21/07/2022)

Source : Foodmarket Newsletter (Urner Barry)

Photo : rawpixel.com