February 4, 2008

US wholesale pork prices move up this week; beef up slightly

Wholesale pork prices climbed 7.3 percent this week amid a modest tightening of hog supplies while beef prices nudged up about 1 percent in the choice grade and 1.4 percent for select.

The USDA's fresh ham quotes climbed sharply this week along with fresh belly prices. The primal cutout value for the ham category Friday is quoted at US$52.19 per hundredweight, up US$7.18, or 16 percent, for the week. The belly primal cutout value Friday is US$78.21, compared with US$72.26 a week ago. The pork carcass composite value gained US$4.13 on the week.

Market analysts said a slightly tighter hog supply and an early Easter holiday are contributing to the strength in ham prices. Easter will be observed on March 23 this year, which allows processors only about six more weeks to produce and ship smoked bone-in and boneless hams to the stores and warehouses for the holiday features.

There was also speculation among analysts and brokers of stronger interest in fresh hams from some international buyers this week, which may have provided some price support.

US cattle packers reduced their slaughter rates this week. Tight to negative processing margins and concerns about demand for meat during February contributed to the light slaughter, analysts said.

Also, Tyson Foods (TSN) beef plant in Emporia, Kansas, began its curtailment of slaughter operations, as was announced last week, by closing the night shift cattle slaughter this week.

The company has not given a specific date on which the remaining slaughter shift will be halted but gave workers a 60-day notice in its announcement last week.