May 26, 2008

 

US beef prices stable, hog prices cool from recent surges

  

    

US wholesale beef prices were generally stable this week ahead of the Memorial Day holiday weekend while the pork markets softened from a week ago.

 

Market analysts and meat brokers said buying interest for beef by grocery chains throughout the week was strong enough to hold wholesale prices steady.

 

Retailers were buying additional beef, mainly the premium steaks, to cover their features for the Father's Day holiday in mid-June.

 

Beef packers on Thursday paid steady to firmer prices for cattle to secure the supplies they need for next week, despite the holiday-shortened slaughter schedules.

 

However, hog and pork prices seem to have hit a barrier late last week after rising sharply since April 1. From April 1 through May 15, wholesale pork prices rallied US$27.38 per hundredweight, or nearly 50 percent, while the USDA's daily national weighted average hog price quotes surged 58 percent during the same period.

 

Chris Hurt, agricultural economist at Purdue University in his latest hog market outlook report released this week said "the average seasonal price increase from early April to early June over the past five years was US$11 per live hundredweight. This year the seasonal increase has been US$23 so far, more than double the normal."

 

Analysts said the much stronger-than-normal gains in hog and pork prices defied the odds because production has remained well above a year ago.

 

Now that hog and pork prices are above year-ago levels, some analysts and brokers predict that retail meat buyers may be reluctant to book and feature as much pork as they did in April and throughout most of May. If so, prices could be under some pressure in the near-term unless production declines further.

 

Total commercial red meat production for the month was a record high at 4.3 billion pounds, up 14 percent from a year ago, according to the USDA's its monthly slaughter and meat production data for April.

 

Year-to-date combined meat output is up 5.9 percent.

 

Beef output was up 12 percent but pork was up a stong 18 percent above a year ago.

 

Last week's cattle slaughter was up 1.4 percent from a year ago, while year-to-date hog slaughter is up 9.9 percent.