Trilateral Protein Heat Map

Protein Heat Map Commentary

Best Value Buys

  • Pork Loins are beginning their seasonal rise and are still almost 10% lower than where they were this time last year.
  • Bellies are 38% lower than they were just 3 weeks ago and entering a bottoming phase.
  • Butter is down nearly 4% year-over-year, 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 be ahead of versus chasing a market with the herd.

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 with biggest winners being Strips (+32%), Tri-Tips (+25%), and Grinds (+18%).  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.
  • 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.