April 14, 2008

 

US wholesale beef prices rebound while pork extends gains

 

 

Wholesale beef prices have rebounded this week, ending a long run of low prices for choice grade and select cuts while hog producers are beginning to see hope in rising wholesale pork prices.

 

Slow domestic demand for beef and large supplies of competitive proteins pork and chicken have pressurised the wholesale beef market throughout most of this year.

 

Months of low prices have encouraged some buyers to step into the market to replenish their inventories and book additional product for deliveries in late April and into May.

 

Demand for certain beef cuts such as premium steaks and hamburger, is expected to improve into May as good weather for backyard grilling will arrive across most of the country, according to analysts. The period from Memorial Day through Independence Day is also considered the top demand period for beef, especially the grilling cuts.

 

Meanwhile, the USDA estimated this week's cattle slaughter to be at 645,000 head, up 21,000 heads from a week ago and up 32,000 heads from a year ago.

 

Aside the improvements in US wholesale beef prices, the wholesale pork markets are seeing higher prices this week, including cash hogs, extending the price rebound.

 

Pork cutout on Friday afternoon is at US$62.6 per hundredweight, up US$3.4 from a week ago, according to the USDA.

 

Cash hog prices also went up by US$3.6 or 5.7 percent this week, according to USDA's national weighted average quotes.

 

Record exports sales of pork in February and expectations of seasonally tighter hog supplies over the next several weeks are helping to push up hog prices, analysts said. Still, producers are losing a lot of money on each hog sold due to extremely high feed costs. The losses are causing an increasing number of producers to sell off a portion of their breeding animals in an effort to cut output and raise prices down the road.

 

The week's hog slaughter was estimated at 2.2 million head, compared with 2.3 million last week and 1.9 million a year ago.

 

In addition, the USDA estimated total beef, pork and lamb production for the week at 960.3 million pounds, surpassing last week's output of 950.3 million pounds and last year's output of 864.9 million pounds.