August 31, 2007

 

US Retail Meat: Wide variety expected in early September

 

 

Grocers' meat and poultry features during the first half of September are expected to include a wide variety of cuts from among the three major categories, including some grilling items along with more roasts.

 

September is a transition period for meat features between the summer grilling season and the cooler autumn and winter months, when shoppers typically purchase more beef or pork roasts and whole chickens for the family dinner.

 

Expectations for tighter beef supplies ahead while slightly more chicken and 2 to 4 percent more pork are projected to be available this autumn could affect how aggressive grocers will be in securing the products needed for their weekly promotions.

 

Market analysts said retail buyers may want to book beef earlier than normal due to the tighter supplies and risk of either not having enough or being forced to pay more later on. Meanwhile, seasonal trends for declining pork prices along with bigger supplies projected in the weeks ahead may encourage retail meat buyers to hold off booking the product until closer to the time it will be used.

 

Some grocers may leave a few spots open in their weekly advertisements until just before they have to go to the printers. The buyers and meat merchandisers will then fill those spots with the cuts that can be purchased at the most attractive prices and that they feel will help generate more store traffic by drawing in additional customers.

 

 

Beef

 

Beef features this week, which for many grocers will include the weekend and Labour Day holiday, showed mainly ground beef products along with steaks for grilling.

 

Some grocers offered two-tiered price reductions, with an advertised price below normal without other purchases required or at even more money off if the shopper spends a certain amount on other items in the store as well.

 

Analysts said this practice helps grocers prevent shoppers from store-hopping and purchasing only the "hot" deals without buying other products as well. Some retail chains also only allow customers with a frequent shopper's card to receive the discounted prices.

 

Slaughter-ready cattle supplies are expected to be down from a year ago during the next few months based on the latest monthly cattle-on-feed figures released by the US Department of Agriculture. The data showed the number of cattle in the nation's feedyards as of August 1 down about 5 percent from a year ago. The number of younger lighter-weight cattle placed into feedyards in July was down 17 percent from the same period in 2006. Since it takes about four months for the younger cattle to reach slaughter weight, grain-fed beef supplies are expected to be tighter through the autumn months.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.65 a pound, compared with US$3.87 last week and US$3.80 last year.

 

 

Pork

 

Year-to-date hog slaughter through the latest week is up 2.4 percent from the same period in 2006, according to USDA. Slaughters during August have averaged nearly 3.2 percent above a year ago, and market analysts expect pork supplies to be at record levels this autumn and winter.

 

The hefty supplies will put pressure on prices, which should encourage grocers to keep some pork cuts in the weekly promotions in September but not always in a lead role, analysts and meat wholesalers said. The stores will promote beef and chicken as well pork as a sub-feature.

 

Meat buyers may plan to purchase pork closer to the time it will be used since the seasonal trends are lower for loins, butts and spareribs after the Labour Day holiday. The expected large supplies also could contribute to a buy-as-needed practice among grocers.

 

Consumers also may see more bargains in the pork section of the meat case, including whole boneless pork loins, butt roasts and steaks along with spareribs from time to time. Analysts said the hottest deals may not show up until later in the year, when weekly slaughters should be among the largest of the year.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.40 per pound, compared with US$2.27 a week ago and US$2.48 a year ago.

 

 

Poultry

 

Boneless/skinless chicken breast prices delivered into the northeast US as of Wednesday were reported about 10 cents per pound higher than a week ago. Bone-in breasts were up 4 to 5 cents.

 

Eric Scholer, market analyst with Express Markets Analytics in Ft. Wayne, Indiana, said solid demand for the Labour Day holiday and reduced live weights with increased death losses due to very hot temperatures in the southeastern US have been bullish factors for the market. For the near-term, seasonal declines in prices into September could be tempered by the lingering effects of the heat, he said. It could take three to four weeks for slaughter rates and bird weights to recover to expected levels.

 

The USDA's weighted average price for boneless/skinless breasts Wednesday was about US$1.72 per pound. Scholer predicts that prices could drop to about US$1.45 a pound by the end of September and average around US$1.50 for the month. That compares with a September average of about US$1.29 a year ago and US$1.46 for the last five years.

 

Export sales for leg-quarters remain strong, especially to China and Russia, which should result in stable prices for the near-term, Scholer said. The USDA quoted the weighted average northeast US price Wednesday at 50.47 cents per pound, which was generally flat with the past two weeks and up about 27 percent from a year ago. He predicts wholesale prices will hold near the current level through September.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.53 a pound, compared with US$1.49 a week ago and US$1.46 last year.