Trilateral Protein Heat Map – 7/17/2019

Trilateral Protein Heat Map
Jumbo Boneless/Skinless Chicken Breasts present great value along with the morning staples Eggs and Bacon.

Best Value Buys

  • Boneless/Skinless Breastmeat. Jumbo breastmeat was up last week as it is entering a seasonal uptrend, but is still 12% lower than last year.
  • Pork Bellies and Bacon are well below last year (down 45%). Although they typically top this time of year, current prices are near the level buyers will start to purchase and store in the freezer for a rainy day.
  • Eggs are 57% lower than this time last year. Eggs typically rise this time of year.  Any buyer who worked during the Avian Flu epidemic, knows the value in locking this item in on a long-term contract at price levels near all-time lows.

What to Watch For – The Buyer’s Perspective

  • According to a Reuters report released June 30th, industry insiders say the swine fever toll in China may be twice as high as reported. African Swine Fever has had some influence on the market thus far, but not to what many people feared.  We believe this is the calm before the storm.  Although pork prices have risen in China in some areas, they have not had the severe reduction in pork production as forecasted. This is because any farmer that has a healthy animal is bringing it to slaughter to avoid getting the virus.  This is causing a flood of production in the near term.  However, once this cycle crop is complete and the Chinese, according to their government, are facing a minimum of 20% loss of herd (private analysts say 40-50%), the real shortage of protein will present itself.  This will affect all proteins across the board as chicken and beef will become substitutes for the Chinese staple.