March 22, 2010

US wholesale beef prices move up; pork trades in choppy fashion

Wholesale beef prices in US moved higher for the week with gains stretching to six consecutive days for both the choice and select grades.

The USDA quoted the choice beef carcass value Friday (March 19) at US$156.64, up US$7.00, or 4.7%, from a week ago. That represents a gain of 17.7% from the year-ago figure. Select grade beef is up 16.3% from last year.

However, the pork complex did not keep pace with beef as its carcass composite value see-sawed in choppy fashion then ended basically unchanged from a week ago.

Demand for beef at the wholesale level has improved, and buyers are being forced to pay more for the limited amount that packers have available to sell, said industry analysts and brokers.

The much-welcomed arrival of warmer temperatures in the northern regions of the country, especially, after a long hard winter may generate an early spark to sales of grilling cuts.

Prices have climbed for each of the beef primal cuts this week, but loins have gained the most, advancing US$16.38 per hundred pounds, or 8.0%. Retail cuts produced from the loin primal include premium steaks such as T-bones, porterhouse, sirloin and tenderloin, or fillet mignon.

Pork carcass values rose sharply in the first two months of the year on tightened hog supplies and lighter carcass weights, which further pulled down the pork production.

Some analysts and meat brokers said the gains in prices made earlier were too much and too fast to be sustained, so they were not at all surprised when the carcass value stalled in early March then slipped backwards a bit the past two weeks.

In addition, hog slaughter rates in recent weeks have rebounded against year-ago levels, and this week's total pushed slightly above the 2009 figure. This was the first week for slaughter to be above a year ago since the period-ended January 2. January and February weekly slaughters averaged 4.5% below the same period last year.

This week's cattle slaughter was estimated at 616,000 head, compared with 618,000 a week ago and a year ago. Year-to-date cattle slaughter is up 0.3% from a year ago.

The week's hog slaughter estimate was 2.166 million head, compared with 2.132 million a week ago and 2.158 million a year ago. For the year, hog slaughter is off 5.2%.

The USDA estimated total beef, pork and lamb production for the week at 917.9 million pounds. Last week's output was 913.5 million pounds, and the year-ago figure was 934.8 million pounds. Year-to-date combined meat output is down 3.7%.

Broiler/fryer slaughter for the week was estimated at 160.454 million head, compared with 159.069 million a week ago and 154.153 million a year ago.