There’s been a lot of back and forth this week about the future of a federal stimulus package. The lack of certainty on the consumer side is impacting commodity demand, particularly livestock.
“Everybody’s counting on this stimulus package to help them out a little bit,” said Karl Setzer of AgriVisor. “A few extra bucks a month doesn’t seem like a lot, but when a consumer goes to the store and they barely have enough money to pay rent, they’re not going to be buying filet mignon and T-bones when it comes to meat. They’re going to be buying hamburger or switch to pork.”
Retail prices of pork have dropped considerably. Some retail chains have slashed prices of pork shoulders to 99 cents a pound or have offered buy-one-get-one free on pork loins.
“Consumers are definitely opting towards cheaper cuts of meat, also going through a bit more poultry,” said Setzer. “We don’t know what consumers are going to do going forward. We’re not seeing stake demand on the retail side and stores.”
Setzer said if there was a concrete response on whether there will or won’t be a stimulus package, it would be better for the market than the uncertainty.
“We can plan ahead if we’re not going to have a stimulus package,” he said. “It’s a wild card we cannot put our finger on right now but the back and forth is worse than not knowing at all.”
Setzer previews USDA’s Friday reports and talks about how a La Nina could impact wheat planting in his full comments in the audio player above.