Fishtailing: pressured chicken wing prices
Two months ago, on June 13th, a post titled “Fishtailing: prices in the chicken wing market” was published on Expana’s website in “This week in poultry, eggs & dairy.” In this post, it was stated, “The year 2020 seemed to send the industry into a bit of a fishtail. COVID markets led to a large price dip in April, from which the wing market recovered quickly. Wholesale wing prices not only recovered by May but steadily increased through much of 2021. Prices finally began to decline in late September, but then kept decreasing to the lowest values seen since 2014 from mid-August through September. In June of 2023, we finally began to see those prices rise again, and they’ve continued that trajectory to the current date.” We’re now starting to see a correction towards “the middle of the road”, a welcome relief to most industry participants, regardless of whether they are buyers or sellers. On June 24th, small and medium wing quotations hit their year-to-date (YTD) peaks at $2.38 and $2.53, respectively.
Small wing quotations were held through July 15th before steadily declining. Medium offerings were able to hold their YTD highs for a day longer. Jumbo wings peaked a little bit later July 1st at $2.52, which was maintained until July 19th. From July 22nd to August 9th, listed quotations for small and jumbo wings decreased every market day by anywhere from $0.01 to $0.03 per day. They are currently at the values of $1.97 and $2.21, respectively. Medium offerings have been less pressured and are currently sitting at a value of $2.31. Market participants suggest that relatively consistent demand from retailers and restaurant chains that specialize in wings may be contributing to the less prominent downward price movements of medium offerings in comparison to jumbo and small wings. Seasonally, wing prices often start to move higher throughout August and September due to demand generated by football season, but industry sources question whether that will be the case this year. We will all have to wait a little while longer to see what this season holds.
Total turkey export volumes down
The total volume of turkey exported decreased month-over-month (MoM) in June by 6.9%. This resulted in the second lowest value of June of the past ten years at 37.6 million lbs., well below the 5-year average of 47.1 million lbs. In May, the top five export destinations for turkey from the U.S. were Mexico, Canada, Jamaica, the Dominican Republic, and Guatemala. All had year-over-year (YoY) decreases in June. Guatemala had a large enough reduction in product movement that it dropped from the fifth position as a U.S. turkey export destination to the eighth. Though the top five buyers of turkey in May had lower volumes YoY in June, Jamaica and the Dominican Republic had improved MoM changes compared to the 5-year average MoM changes for these countries. Mexico has consistently been by far the largest buyer of turkey over the past ten years, contributing to an average of 64% of total export sales. Due to the large share Mexico has in the U.S. export market, it heavily influences the total export volumes. Data from the past ten years reveals a very strong correlation between product movement to Mexico and total product movement. This June, turkey exports to Mexico were down -10.9% MoM compared to the 5-year average decrease of -18.7%. This slowdown in buying from our neighbors south of the border may have been influenced by a struggling economy. From May to June, the strength of the USD to the peso increased by 8.0%, while the 5-year average change is a decrease in the value of the USD to the peso of -1.6%. Additionally, Trading Economics is forecasting a government budget deficit for Mexico of -5.9%, compared with the 5-year average deficit of -3.7%. This is backed by the fact that Mexico also had decreased MoM purchases of beef and veal, hogs and pork, shell eggs and products, and broilers from the U.S. compared to the 5-year average MoM changes.
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Written by Nick Wood
