March 30, 2007

 

US retail meat: Better buying interest seen ahead

 

 

Buying interest from grocers for fresh meat and chicken cuts is expected to improve soon, possibly beginning by late next week since the Easter and Passover features are completed and buyers will be looking for products to promote for late April and early May.

 

Movement of beef and pork this week in the wholesale spot markets has been rather slow due to buyer caution and because some retail meat buyers and merchandisers may be focusing on tying up any loose ends that exist on their early April promotions.

 

 

Beef

 

The Dow Jones Newswires 10-city survey of featured items this week showed that many of the stores included two or more of the premium steak cuts such as T-bones, strips or rib-eyes. They also enticed shoppers into the stores with lower-priced ground beef products and chuck roasts.

 

Wholesale prices for choice and select beef have declined in the past two weeks since hitting 3 1/2-year highs at the middle of the month. A Midwest-based market analyst said the high prices "scared off" retail buyers and caused some to them to reduce the number of beef items to be included in their weekly promotions for much of April.

 

The US Department of Agriculture quoted the choice primal rib value Wednesday (Mar 28) afternoon at US$243.42 per hundredweight, down US$16.30 from US$259.72 reported on March 15. The USDA's choice-grade loin primal value Wednesday was US$249.10, down US$6.78 from its mid-month high. However, these latest quotes were about US$20 and US$27 above their respective values for this week a year ago.

 

Slowed buying interest may pressure wholesale prices further to levels that will be more attractive to grocers within the next week or two, the Midwest analyst said. If so, there could be a flurry of buying activity then for late April and May features.

 

Urner Barry's Yellow Sheet said in its midday Thursday comments that buying interest for loin cuts is reportedly fairly active. However, price indications for the end cuts--chucks and rounds--remain weak.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.83 a pound, compared with US$3.89 last week and US$3.59 last year.

 

 

Pork

 

Huge weekly hog slaughter totals for this time of the year are keeping retail meat buyers guarded, especially about paying higher prices for forward deliveries, analysts said. Slaughter rates for the past three weeks averaged 2.120 million head, far exceeding the previous weekly record for March set last year at 2.015 million head. And, the daily figures so far this week point to a fourth consecutive total well above the previous record high.

 

However, the big supplies have kept wholesale pork prices from climbing, which may put the category in a more favourable light among grocers for feature activity for April, analysts said. Booking activity for forward delivery is said to be mixed, and some chains reportedly have purchased larger quantities for next month while others are taking a wait-and-see approach.

 

The Midwest analyst said some grocers may be holding off on buying additional pork until they decide how much beef they will include in their features. If beef is difficult to purchase at what the buyers feel are reasonable prices, then they are confident, for now at least, that they will be able to acquire pork as an alternative at acceptable price levels.

 

The Yellow Sheet reported at midday that pork loins and butts remain readily available currently with prices seen steady to weak overall.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.38 per pound, compared with US$2.38 a week ago and US$2.13 a year ago.

 

 

Poultry

 

Reduced broiler production from year-ago levels and reasonably good buying interest for the current period and into April continue to keep wholesale chicken supplies cleaned up, according to meat and poultry analysts.

 

The USDA on Thursday quoted wholesale prices for most chicken cuts on a delivered basis into the US Northeast generally steady to firm compared with a week ago. The current prices are well up from the very low prices quoted at this time a year ago when some cuts were at or near record lows. USDA quoted boneless/skinless breasts at US$1.65 to US$1.70 per pound, up about 60 percent from the US$1.00 to US$1.05 prices a year ago. Line-run bone-in breast prices were at 99 cents to US$1.00, compared with 56 to 57 cents a year ago. And leg quarters are quoted at 41 to 42 cents, nearly triple the year-ago prices at 14 to 15 cents.

 

The broiler industry has begun slowly expanding egg sets over the past two weeks, according to USDA's egg sets/chicks placed reports. Egg sets during the week ended March 17 were reported up 1 percent from last year and up 2 percent for the following week.

 

Market analysts said the slight boost in egg sets would add to the broiler slaughter about 10 to 11 weeks forward, which would be late May and early June. Demand at that time is normally strong due to increased sales around the Memorial Day holiday through Independence Day.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.54 a pound, compared with US$1.55 a week ago and US$1.41 last year.