We see choice briskets having significant upside potential from current lows
We view upside potential from the current USDA price for choice briskets (item number 120 – 1) as strong, in the range of 25-30 cents/lb. over the next four weeks from yesterday’s close of $2.45/lb. Between now and a likely late May peak, we see 60-75 cents/lb. of upside potential. A small seasonal dip is possible in April but our research and forecasts indicate that the choice brisket market is likely at or near a bottom for the first half of 2021.
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1. We believe briskets are underpriced in the current marketplace for beef, trending at three year lows while competing and correlated items have spiked.
2. Our work suggests that the cattle cycle has peaked and we expect relatively flattish US beef production in 2021.
3. All demand channels have reason to be optimistic as foodservice demand improves, retailers prepare for grilling season, and international buying has spiked.