March 3, 2008

 

US grocers to focus on pushing beef sales

 

 

Retail meat buyers are concentrating on beef middle meat markets, raising prices and setting pork and chicken markets back, market analysts and brokers said.

 

Many of the choice middle meat products had languished seasonally, and buyers stepped in to book product, market analysts and brokers said. It appears many are ready to try their luck with beef again, although they are guardedly optimistic about its success with shoppers.

 

Bruce Longo, market analyst with Urner Barry's Yellow Sheet, and others said retail grocers are concerned that high heating oil bills in the Northeast along with rising gasoline costs and continued news reports about a struggling US economy could limit the success of otherwise good meat feature advertisements.

 

Troy Vetterkind, director of livestock analysis and trading with Vetterkind Cattle Brokerage, said meat buyers may stay in a more hand-to-mouth mode for the next few months because of that unease about economic woes.

 

Buyers do not want to be caught with extra product due to volatile demand,  Vetterkind said.

 

Sue Trudell, vice president of EMI Analytics, said media reports of rising prices  could reinforce price concerns and prompt retailers to tailor their products towards the more price conscious. 

 

 

Beef 
 

What seemed last week like retailer preparations for post-Easter beef features now has blossomed into bookings for May delivery, market analysts and brokers said.

 

Shoppers are concerned about the price of many items, and beef is getting good competition at the retail level from pork and chicken. None of the market analysts or buyers said they expected this to change much since supplies of competing meats remain large.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.73 a pound, compared with US$3.82 a week ago but below the US$3.81 last year.

 

 

Pork 
 

While retail grocers are set to offer more beef in coming weeks, pork would still be in the picture, the analysts said.

 

Pork roasts, chops and butt items will continue to cycle through the front pages of weekly newspaper advertisements.

 

Prices may even decline a bit, since wholesale prices for many pork products are fading slowly. Declines may be limited, though, since packers are cutting back on their kill schedules to manage plant margins better.

 

Grocers already have their Easter hams booked, market analysts said. They have pulled back from the uncured ham market, allowing prices to fall.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.20 a pound, compared with US$2.17 a week ago and US$2.45 a year ago.

 

 

Poultry 
 

As grocers try to keep affordable meat choices in front of consumers over the next month, they appear to be planning a series of ads that focus on boneless/skinless chicken breasts, analysts said.

 

Wholesale prices for breasts have been sliding, but with the strong retail emphasis, these prices may not decline sharply. Chicken production is running 4 percent or more over a year ago, and retailers continue to use it for features because of high beef prices.

 

It isn't uncommon to find chicken breast features at retail prices that are below wholesale prices. The retailers are offering these loss leaders to get shoppers into their stores.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.58 a pound, compared with US$1.36 a week ago and US$1.47 last year.