February 11, 2008

 

US wholesale beef prices climb as slaughter heads down

 

 

Wholesale beef prices climbed sharply last week, despite a slight dip in choice values late in the week.

 

USDA reported its choice grade carcass value Friday at US$150.21 per hundredweight, up US$6.05, or 4.2 percent, for the week. Select was up again Friday, making it the 10th consecutive higher day. The select carcass value was quoted at US$145.81, up US$7.43, or 5.4 percent, for the week.

 

Reduced cattle slaughter rates in recent weeks have contributed to the rise in beef prices. Improved export sales also may be a factor helping to push beef prices up, analysts said.

 

Consumer demand domestically for beef remains relatively strong, according to the latest data from Glenn Grimes and Ron Plain, agricultural economists at the University of Missouri. Their calculations show beef demand for 2007 was up 0.6 percent from the previous year.

 

Rising feed costs are squeezing livestock producers' profitability as well as that of processors, shown by Tyson's announcement of the closure of its cattle slaughterhouse in Kansas.

 

However, cattle slaughter totals the past three weeks have averaged about 623,000 head, based on preliminary data, down approximately 1.3 percent from the same period a year ago.

 

The USDA estimated this week's cattle slaughter at 620,000 head, compared with 613,000 a week ago and 621,000 a year ago. Year-to-date cattle slaughter is down 1.4 percent.

 

Hog and broiler slaughter remain high however.

 

This week's hog slaughter was estimated at 2.210 million head, compared with 2.270 million last week and 1.958 million a year ago. Year-to-date hog slaughter is up 9.8 percent from a year ago.

 

The USDA estimated total beef, pork and lamb production for the week at 936.3 million pounds. Last week's output was 944.4 million, up 11.1 percent from the year-ago figure of 876.6 million pounds.

 

Broiler/fryer slaughter this week was estimated at 165.5 million head, compared with 166.095 million a week ago and up 5.1 percent from 157.5 million a year ago.