April 7, 2008

 

US wholesale pork prices rebound from 4-year lows

 

 

Wholesale pork prices rebounded sharply during the second half of the week from more than a four-year low Tuesday, but the beef market struggled throughout the week.

 

Wholesale pork prices touched US$54.87 per hundredweight on Tuesday, the lowest since Dec. 18, 2003.

 

Those price points may have been too attractive for retailers and pork processors to pass up, prompting the rebound, analysts and brokers said.

 

The pork carcass composite value rallied US$4.32 from Tuesday's multi-year low to end the week at US$59.19.

 

Choice beef prices have declined in 12 of the last 15 days and select has fallen in 11 of those days. Beef production through the first 14 weeks of the year is up only 0.9 percent from the same period a year ago, but pork is up 10.2 percent while broiler chicken output is up nearly 7 percent.

 

Wholesale pork prices through the first quarter averaged 12.7 percent below a year ago. Chicken breast prices have also been running below a year ago and in the latest week were down about 30 cents a pound, compared with a year ago.

 

Glenn Grimes and Ron Plain, agricultural economists at the University of Missouri, said in their weekly cattle outlook report released Friday that demand for beef at the consumer level declined at the end of 2007 and beginning of 2008. For November through January, consumer demand for beef was up 0.5 percent from a year ago but for December through February demand slipped to a minus 2.8 percent comparison with a year ago. "The index can and does change substantially within a three-month time frame for the calculation," they said.

 

Seasonal gains normally occur in wholesale pork prices in April through May as buying gets underway for the start up of summer grilling and the string of holidays from Mother's Day through Independence Day.

 

However, analysts and meat brokers said total protein supplies and consumers' concerns about the economy could determine whether wholesale prices will move up as much as normal during this period.

 

This week's federally inspected hog slaughter was up 11.4 percent from a year ago. Next's week's figure could show an even larger percentage increase since the Easter holiday was observed on April 8 last year, which resulted in a reduced slaughter on the Monday after and for that week.