April 10, 2006

US pork prices at 2-year lows while beef prices hit 6-month lows

Wholesale beef prices in the US hit 6 1/2-month lows this week while pork cutout values on Friday (Apr 10) fell to its lowest since late 2003.

Select grade beef prices fell to US$127.37, which was the lowest since Sept 2005 while pork cutout value has fallen sharply from the year-to-date high of US$68.25 to US$56.03.

US beef exports, which has been reduced due to mad cow concerns, have exacerbated the oversupply situation, especially since Japan has yet to re-open its markets.

Record large broiler and pork production in the US so far for 2006, along with increased beef production are also pressuring domestic prices.

Meanwhile, boneless/skinless chicken breasts traded at a low of around US$0.96 a pound, the lowest ever in the month of April, said Bill Roenigk, senior vice president and economist for the National Chicken Council.

Bird flu concerns in other parts of the world have resulted in reduced consumption of chicken, leading to a severe drop in US chicken exports, according to industry sources.

Analysts said current low prices might generate more sales and boost domestic volumes sold.

This week's cattle slaughter rose nearly 4 percent to 636,000 head, compared with 613,000 a week ago. The figure was also nearly 10 percent higher than the same period a year ago, according to USDA estimates.

The week's hog slaughter was also up slightly. Hog slaughter for the year to date was estimated at 27.881 million head, up 0.4 percent from 27.767 million a year ago.