Harrington's Sort & Cull

The Green Flag of Summer

John Harrington
By  John Harrington , DTN Livestock Analyst

With all due respect to pointy-headed scientists diligently tracking the summer solstice, everyone not wearing a white coat knows the practical flag on extended fun in the sun drops this weekend. Ladies and gentlemen, start your grills.

For example, Memorial Day is well documented as a haven for beef gluttons, a Mecca for steak lovers, a capital city for carnivores. If daily beef consumption in this country averages close to 45 million pounds, grocers, retailers, and food managers have good reason to bank on the likelihood that Monday's appetite will be at least 25% greater.

While every marketing year is different, vulnerable to the randomness of many non-seasonal factors, the summer (especially the first half) typically serves up the best of annual meat demand. At least, that's the way to bet.

Weather maps for the long weekend ahead look largely accommodating to outdoor activity and overeating, though some picnicking in the Northeast may be dodging light showers on Monday.

Notwithstanding the mysteries of Doppler radar, demand prospects for Memorial Day and sunny points beyond look more promising this year thanks to cheaper gas and greater vacation plans. AAA is predicting 34 million Americans will drive 50 miles or more for the next three days. That would make this the busiest Memorial Day weekend in about 10 years.

Retail gasoline prices in the U.S. are expected to average $2.32 a gallon on Monday, according to GasBuddy, an online group that surveys motorists and tracks prices nationwide. That's a 37% drop from just two years ago, when Americans paid an average $3.66 a gallon. According to AAA, Americans have saved more than $15 billion on gasoline so far this year compared with the same period in 2015.

There's a pretty impressive correlation between greater travel and vacation activity on one hand and more aggressive meat consumption of the other. While gas prices have no doubt bottomed for the year and now seem set to work higher through the summer, the cumulative boost to disposable income through the first third of 2016 should prove significantly helpful in moving steaks, chops, and bacon over the next three months.

Now if we could only recruit off-duty TSA employees to hawk burgers and dogs to those long lines at the airport.

For more from John see www.feelofthemarket.com

(CZ)

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