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Bellissimo Foods—Market Update
Week of December 19, 2014 Summary

Beef - Beef output last week rose .8% but was 3.9% less than the same week a year ago. Cattle supplies remain limited but the spotty beef demand appears to be causing cattle supplies to back up in the feedlots which is being reflected in the heavier weights. Still, beef supplies are projected to remain tight this winter with the USDA forecasting a 3.7% output decline compared to the prior year. Retailers are starting to shift their beef buying focus to end cut products for January features. This should lift many of the beef end cut markets in the near term. The 168 choice inside round market has risen at least $.10 a pound during the next week each of the last three years.

Pork- Pork production last week rose .8% but was 2.1% less than the same week a year ago. The Porcine Epidemic Diarrhea virus (PEDv) remains a challenge but low feed costs and high hog prices in recent months are providing an incentive for herd to build. Thus, the seasonal decline in pork output this winter is projected to be one of the smallest in decades. The ham markets are on the defensive as demand seasonally wanes. Last year the ham markets fell 13% throughout the next two weeks.

Poultry - -Chicken output for the week ending December 6th was 12.6% larger than the same week a year ago. Bird weights were up 4.1% from 2013. The USDA is forecasting first quarter 2015 chicken production to be 2.9% larger than the previous year but this may be understated. Solid chicken output expansion is weighing on the chicken markets. The ARA Chicken Wing Price Index fell to a one-month low this week despite seasonally building demand. Typically wing prices will rise roughly 12% from now through the Super Bowl but any pending wing price appreciation in January may be tempered. Sharply lower wing markets are likely by the spring.

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