September 16, 2009
US beef demand weakens
Rising frozen pork supplies, upgraded harvest forecasts and the highest unemployment rate since the early 1980s combine to weaken US beef demand.
The US government is planning to buy US$30 million in pork products as part of its federal food assistance program to help the industry.
Frozen pork supplies rose eight percent on-year in July whereas frozen beef only increased by four percent in the same period, USDA Cold Storage said.
Likely cheaper pork prices on rising supplies and AH1N1 concerns are expected to increase competition with beef going into the year-end holiday season.
Grain harvest estimates have been revised up this month, and it augurs well for input costs for US feedlots, which have struggled with negative margins for much of this year.
Finally, August has seen the US unemployment rate rise to 9.7 percent, the highest level since June 1983. High unemployment will tend to limit foodservice demand and beef sales in particular.
