September 17, 2007

 

US pork prices gain marginally in week amid heavy slaughter

 

 

Wholesale US pork prices gained marginally last week in spite of very heavy slaughter rates and prospects for another heavy slaughter week next week as buyer interest moved away from beef and toward "the other white meat."

 

The US Department of Agriculture reported the pork carcass value Thursday (September 13) afternoon at US$67.46 per hundredweight, up from US$67.27 reported on Monday. Monday's low was the lowest the cutout had been since April 12 when it was US$66.43.

 

These levels are attractive to retail meat buyers who also are looking at beef cutout values that are considered too high to afford an attractive, yet profitable, beef feature, market analysts said.

 

The USDA on Thursday reported the beef cutout at US$146.05 per hundredweight, down from the week's high of $148.42 reported on Monday.

 

Market analysts say retail buyers like a beef cutout near US$140 to US$145 for attractive, profitable beef specials in the stores. They also like cutout values to be stable so they don't end up owning a lot of expensive product that they have to sell at a loss.

 

Grocers already have beef features planned through the first week of October, but market analysts say they are planning to switch to pork after that.

 

Pork cash prices traded sideways last week after gaining a little on Tuesday. Cattle had not traded to any appreciable degree through mid-afternoon on Friday, and what did trade in Nebraska was done at lower prices.

 

Cattle sellers were unwilling to sell at a loss, and packers were tired of operating at a loss, market analysts said. A standoff ensued as sellers refused to give up.

 

There was talk that most of the major beef packing firms were planning to prune their slaughter rates this week, but cattle owners were having none of it, the analysts and brokers said. Packers have changed their minds about slaughter rates so many times in the past that sellers habitually take a show-me attitude about such moves and were holding asking prices steady.

 

US cattle slaughter for the holiday-shortened week was estimated at 643,000 head, compared with 598,000 a week ago and 667,000 a year ago. Year-to-date slaughter stands at 23.964 million head, up 1.2 percent from a year ago.

 

Last week's hog slaughter this week was estimated at 2.226 million head while the previous week was estimated at 1.926 million, and the year-ago figure was 2.138 million. Year-to-date hog slaughter is 73.537 million head, up 2.4 percent from a year ago.

 

The USDA estimated total beef, pork and lamb production for the week at 948.7 million pounds. Last week's output was 853.5 million pounds. The year-ago figure was 953.9 million. Year-to-date combined meat output is 33.369 billion pounds, up 1.3 percent from last year.

 

Broiler/fryer slaughter for the week was estimated at 149.496 million head, compared with 171.530 million a week ago and 154.603 million a year ago.