More Ribs on Grills this Memorial Day as Meat Output Expands
- Much of the US pork supply is being exported
Alongside their traditional burgers and hot dogs, Americans will be grilling a lot of pork ribs on Memorial Day, when more meat is barbecued than at any other time of year.
A lot of pork is available for domestic consumption, with a record-sized US hog herd for this time of year.
Prices have taken a hit, and hedge funds are the most Bearish on the market outlook since Y 2013. There’s about 2% more supply of the meat than a year ago, and the only way to get customers to eat more is if it’s less expensive.
“Some stores are doing buy-one-get-two pork ribs,” which shows grocers are offering bigger discounts to clear out inventory, said the chief strategist at Allendale Inc. in McHenry, Illinois. “We do have to realize that we are in an oversupply portion” of the price cycle, he said.
Stockpiles of ribs in the US as of 30 April were up 6% from a year earlier and an all-time high for the month, according to the latest data from the US Department of Agriculture (USDA).
Plus, there were nearly 73-M hogs and pigs in the US as of 1 March, a record for the time of year, USDA data show.
Wholesale ribs fell 10% from a year ago to $1.2646 lb Thursday, while wholesale pork is down about 18% and the cheapest for this time of year since Y 2009, government data show.
Hedge funds are taking notice and adjusted their holdings of hog futures and options.
Traders’ net-Short position up for a fourth straight week to 10,053 contracts in the week ended 22 May, according to US Commodity Futures Trading Commission (CTFT) data released 3 days later. That is the most bearish since April 2013.
There is no motivation to buy now because prices are going to go lower. That is the market’s way of anticipating huge supplies.
Trade risks are also affecting pork because so much of the US commodity is exported. Last year, about 27% of production was shipped overseas.
US President Donald Trump’s determination to renegotiate the North American Free Trade Act could affect sales to the country’s biggest buyer: Mexico.
China, also a purchaser, recently placed retaliatory tariffs on pork during a trade spat sparked by Trump imposing tariffs on some imported Chinese items.
US consumer demand for pork is strong, according to the director of market insights for the National Pork Board. Ribs and chops are Summer favorites, with 40% of all ribs and 33% of all chops sold between Memorial Day and Labor Day.
Hog futures for July settlement in Chicago closed Friday at 77.55c lb, + 0.4 on the the week and rallying for a 3rd week running.
While there is also rising US chicken and beef supplies, there looks to be more than enough demand in the grocery stores, especially with new products like pre-seasoned ribs that are increasingly popular.
If there is meat in the case, and retailers promote it, consumers will buy and eat it.
Have a terrific Memorial Day weekend,
Latest posts by Paul Ebeling (see all)
- Eat REAL Food to Improve Overall Health - August 23, 2019
- President Trump Ups the Stakes in the China Trade Dispute - August 23, 2019
- Gold Marks 6-Year Highs on Renewed Safe-haven Demand - August 23, 2019