October 4, 2008

US economy slump affects beef trade

With the US economy acquiring large losses in the financial and equity markets, the US imported beef market remained light during the week, due to the presence of more sellers than buyers.

Currently, prices trend is lower, with many participants observing that buyers will continue to trade on an immediate needs basis, as uncertainty remains on how US household consumption habits will respond in coming months.

However, there are also some traders who believe that the recent turn of events will favour demand for lower value meat products such as hamburgers, indicating the downturn in the market is only temporary.

Much of the focus in the US beef market has been on the CME live cattle futures market which took a battering during the week as buyers pulled back on activity, due to the downturn in the economy.

Reduced activity is partly attributed to weak demand in the foodservice sector and lower prices of competing meats.