With the economy opening up and growing rapidly, meat markets of all types are enjoying strong demand. In fact, Derrell Peel, Oklahoma State University Extension livestock marketing specialist recently noted protein markets are “red hot.”
“In numerous cases, wholesale prices for specific meat products are at record levels, exceeding the levels provoked by the pandemic disruptions one year ago; and unlike last year, lack of supply is not the issue,” he said.
Year-to-date production of beef, pork, and broilers is higher, not only compared to last year but also compared to 2019 levels.
Peel pointed out that broiler breast meat price has been at record levels in May, fueled by the chicken sandwich wars in quick service restaurants (QSR). USDA data showed the average April wholesale price for boneless/skinless breasts was $1.72/lb., 44 cents above the same month in 2019.
Chicken leg and leg quarter prices have also risen sharply since the beginning of the year, which Peel said is likely due to export demand.
According to USDA’s most recent “Livestock, Dairy and Poultry Outlook,” weekly average chicken drumstick prices at the end of April and early May were almost 51 cents/lb. The April average price was 48.9 cents, about 14 cents above the same month in 2019.
USDA said chicken wings, which have been in high demand as takeout food, have been steadily climbing in price since last year. Further, Peel noted that chicken wing prices this year did not drop after the “Super Bowl bump” but instead have continued to increase to record levels, passing the $3.00/lb. mark for the first time in the last month. USDA data showed the average price in April 2021 was $2.92/lb., 92 cents above the same month in 2019.
Wholesale turkey prices for frozen whole hens have also been higher, averaging $1.14/lb. in April, 12 cents above the same month a year ago. USDA said prices ended the first week of May at $1.19/lb. with frozen whole-hen prices continuing a steady climb from 2018 levels. USDA’s wholesale whole-hen frozen turkey price projection for the second quarter were adjusted upward to $1.16, and Q3 and Q4 prices were revised higher to $1.16 and $1.15, respectively.
Meanwhile, wholesale pork carcass cutout prices have risen steadily all year, pushing past the levels of the pandemic spike last year to the highest values since 2014. Peel reported that pork tenderloin prices have increased since the beginning of 2021 but have remained below the pandemic levels of one year for several weeks. Wholesale ham prices increased from the first of the year until late April and have since retreated slightly. Hams, on the other hand, have been a popular export item, and pork exports jumped sharply in March.
According to Peel, pork belly prices peaked recently in April, to the highest levels since 2017. Pork spare rib prices also reached record levels recently, pushing above $3.00/lb. for the first time.
“Spare ribs are often exported but the recent strength in spare rib prices may also be related to a rebound in BBQ restaurants,” Peel explained.
Pork cold storage holdings were drawn down sharply one year ago and remain at very low levels, which Peel said is partly due to the surge in pork exports to China that began in 2019.
On the beef side, the boxed beef cutout price has pushed higher since the beginning of the year, Peel reported. Middle meats have led the way, he said, with wholesale beef tenderloin and ribeye prices setting new records in the most recent data with tenderloin over $17.00/lb. and ribeye over $13.00/lb. Tenderloin is almost exclusively a restaurant item while ribeye is popular in restaurants, at retail grocery and for export. Strip loins are very popular at retail grocery and prices have also increased sharply this year. However, Peel said they have failed to exceed the pandemic levels from last year.
Brisket prices have increased dramatically since January, averaging over $7.00/lb. in May, “another indication that BBQ is back.”
Chuck and round products are higher, though less so than the middle meats. Peel said end meat demand is driven by retail grocery use for value cuts and for ground beef, as well as export demand.
The price of 50% trimmings is higher compared to January but has dropped back from recent peak prices in mid-April. Peel said the supply of fatty trimmings, which are mostly used for foodservice ground beef, is relatively large due to increased slaughter of heavy fed cattle. The price of 90% lean trimmings remains strong with high demand for lean to match supplies of 50s, he added.
