April 4, 2008

 

US grocers hoping for springtime sales boost in meat and poultry

 

 

US grocers are hoping for a springtime boost in meat and poultry sales following extended cool, wet weather conditions that have lingered across the northern half of the country.

 

Market analysts and meat brokers in the US said the early Easter raised hopes of increased sales following the holiday, but the weather has not cooperated.

 

Shoppers are waiting for warmer temperatures and some sunshine before making plans to grill out.

 

Furthermore, concerns about the economy, record high gasoline and heating oil prices and squeezed food budgets are said to be affecting consumers' purchasing decisions at the meat counter.

 

Many US shoppers are purchasing the cheaper meat cuts and more of the lower-priced private label house brands versus national brands, analysts said.

 

The Dow Jones Newswires 10-city survey shows that grocers are promoting many of the pork cuts at prices below a year ago.

 

The same was true of beef, while the average price of the chicken items came in very near the year-ago value.

 

The shift to cheaper meat cuts has affected beef sales the most, particularly the premium items, analysts said.

 

As shoppers are not purchasing as much beef, the grocers are buying less of it from processors, so prices have been under pressure at a time when the wholesale market would normally be firming up.

 

The USDA's choice grade beef carcass value on Wednesday afternoon was quoted at US$137.77 per hundredweight, down 10.9 percent on-year.

 

The USDA's quote for the primal rib cut on Wednesday was US$202.20, which was down about US$3.00 so far for the week and approximately 18 percent below the year-ago figure of US$247.05. The primal loin cut was also down sharply from a year ago, with Wednesday's price reported at US$198.47 versus US$252.81 last year.

 

Market analysts said large supplies and low prices for competing pork and chicken are contributing to the slower beef sales. Wholesale prices for select grade beef are down 5.1 percent from a year ago.

 

Meanwhile, record large hog slaughters and pork production occurred in the first quarter, and the outlook for the April through June period is more of the same.

 

In its latest quarterly hogs and pigs inventory report released March 28, the USDA estimated the market hog supply at 107 percent of a year ago.

 

Market analysts said grocers will continue to feature pork cuts due to the low prices but either in a shared status with beef or in a secondary role.

 

The chicken category saw moderately active featuring this week, but prices were not very aggressive.

 

A meat and poultry analyst said because grocers promoted a fair number of beef and pork cuts at attractive prices, they may wait until later in the month to actively promote chicken.

 

The USDA reported broiler egg sets last week at about even with a year ago. This was the second week for egg sets to be on par with last year.

 

Prior to that, processors were placing from 2 percent to 3 percent more eggs into the incubators. Supplies of slaughter-ready birds are expected to reflect the larger egg sets through early June then slip back nearer to the year-prior level.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.47 a pound, compared with US$1.55 a week ago and US$1.49 last year.