Trilateral Protein Heat Map

Trilateral Protein Heat Map

Protein Heat Map Commentary

Best Value Buys

  • Pork Loins are in the process of seasonally bottoming and are one of the few protein items that are lower year over year (down 13.65%).
  • Hams were down 2% last week, have a flat seasonal now, but will be in demand as we approach the holiday season in quick couple of months. They are also in a price area that has seen price support before.
  • Broiler/Fryers dropped 4% last week and are down 7.6% y/y. The seasonal indicator is flat, but prices are in an area that has garnered support in previous years.
  • Despite being 3.28% higher than last year, Beef Tenderloins are still considered a good value buy. Most items in the beef complex are much higher than they were a year ago.  Tenderloins are relatively cheap.  In addition, they are beginning a seasonal uptrend that should last to early December.
  • Butter was down nearly 4% last week, despite being in a historical, seasonal uptrend that will last until the baking, holiday season. Trade believes that many end-users are still uncovered for the fall and holiday baking season.  This potentially sets up a very bullish scenario that buyers want to stay in front of.

What to Watch for – The Buyers’ Perspective

  • Beef demand continues to dominate. Almost all of the beef items in our heat map are up double digits on a year-over-year percentage basis.  Expectations are for this trend to continue as many around the world are ascending out of poverty and adding delicious proteins like beef to their diets.
  • As Labor Day comes and goes, look for grilling items to fall in price (strips, ribeyes, ribs, etc.) and slow-cook items to gain value (briskets, butts, ground beef).
  • Chicken Wings, although 20% higher y/y, should maintain some support the next few weeks as the football season begins.
  • With the ominous spreading of ASF throughout the world, it may be more prudent to have more pork on hand than less, as exports should increase in the coming months. The wildcard in this story is if it hits on the CONUS; then, prices should plummet in the immediate as farmers will bring their stock to market to avoid infection, causing a ballooning of short-term supply.