August 17, 2007

 

US Retail Meat: Shoppers may find good September meat features

 

 

It appears that grocery shoppers may find a good selection of meat at their local supermarket in September, and some of it may be at attractive prices as well.

 

Meat market analysts and buyers say grocers appear to be setting themselves up for active beef and pork advertising during the month, but active chicken featuring may be hit-or-miss after the Labour Day holiday.

 

Grocers are geared up for the traditional grilling items for the holiday, and many appear to be ready to do battle with their competition for consumer interest, they said. Prices and splashy displays in their newspaper supplements are aimed at attracting shoppers into their stores where more than just meat might be purchased.

 

Anything flat that will sit still on the grill will be displayed prominently, as will sausage products like bratwurst and hot dogs, they said.

 

Meanwhile, hot weather continues to prompt sales out of the grocery store delis. Sliced ham, turkey and roast beef are popular products, along with rotisserie chicken.

  

There are reports that some grocers have a lot of beef products purchased for delivery during September. The aim is to offer beef in weekly specials all month, analysts said.

 

However, Kevin Bost, president of Procurement Strategies Inc., said wholesale prices at the time of booking weren't what he would consider to be good, so September's many advertised beef products may not have an attractive price tag.

 

The exceptions could be a few middle meat products like choice ribeyes and select short loins, Bost said.

 

Beef featuring this year has suffered from a lack of correct timing, Bost said.

 

"We haven't gone through a stretch of low (live cattle) futures prices, ideas of low futures prices coming and low wholesale beef prices," Bost said. The market needs to get forward prices down to where they're not reflecting all kinds of bullish expectations, he said.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.93 a pound, compared with US$3.87 last week and US$3.79 last year.

 

While beef markets haven't seen the combination of low prices and low price expectations that might be necessary for active retail feature expectations, some wholesale pork prices have, Bost said. Butts are near yearly lows, and loin prices are low, as well.

 

Those products are expected to be big feature items in September because the price is too low to pass up, market analysts said. In addition, September and October traditionally are big months for pork sales.

 

Jim Kenney, market analyst with Urner Barry's s Yellow Sheet, said butts are well sold for delivery over the next two weeks so much of it probably is planned for the Labour Day holiday. However, to keep retail prices low, grocers are likely to offer bone-in cuts from these primals, he said.

 

Kenney said he hadn't heard of any extra ham purchases in preparation for the end-of-year holidays. Some buy in the summer on a routine basis, and he assumed they had done so again this year.

 

It might be a good time for them to begin thinking about holiday hams, though, because prices of uncured hams are expected to be below year-ago levels into early November but be back above year-ago levels by December. Retail buyers may think about them more after the Labour Day holiday.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.35 per pound, compared with US$2.35 a week ago and US$2.33 a year ago.

 

Chicken isn't a big player in this week's retail grocery advertisements, although one major firm has breasts as a featured product, market analysts said. Wholesale chicken prices are too high to make for productive features, market analysts said.

 

Especially absent from the feature page are leg quarters, which are aimed at the export markets of China and Russia, the analysts said.

 

Hot weather isn't hurting birds while they are in the growing houses, said Sue Trudell, senior director of Express Markets Analytics. However, transportation-related mortality rates are high enough to be getting the attention of producers.

 

So far, wholesale prices haven't been affected, because most of the problem has been in larger birds meant for deboning, but product availability for retailers at certain locations may be limited.

 

As a result, wholesale prices for chicken could rise in the near future, Trudell said. She speculated that boneless/skinless breasts might be affected because of their appeal to the US consumer and that they come from the larger birds.

 

In the short term, market analysts said a lot of chicken is planned for inclusion in Labour Day advertisements but less of an emphasis may follow in September.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.63 a pound, compared with US$1.62 a week ago and US$1.39 last year.