May 31, 2004

US Wholesale Light Choice Beef Prices Off 8.7% In Last 14 Days

The U.S. Department of Agriculture has reported lower light-weight choice boxed beef prices for 14 consecutive days, during which the category has lost $13.91 per hundredweight, or 8.7%.
 
Heavy choice and select grade beef prices have fallen in all but just one or two days during this period.
 
The composite pork carcass price, commonly referred to as the daily pork cutout value, was up $0.45 per hundredweight on Friday, breaking a string of eight consecutive lower days. From May 10, when the cutout value hit a multi-year high, through Thursday¡¯s quote, the cutout lost $10.11, or 11.5%. For the week, the cutout was down $7.03, or 8.2%.
 
Livestock and meat market analysts said it is common for wholesale meat prices to weaken just ahead of the Memorial Day holiday. Prices typically begin to move up in late April or early May and climb further through the second to third week of May as grocers procure the products they need for their holiday promotions. Some cuts, especially those that are popular for backyard grilling, advance quicker and further than others. However, once grocers have the bulk of their holiday needs filled, prices typically retrace some of their earlier gains.
 
Some livestock sources and market analysts late this week were predicting wholesale beef prices would stabilize or possibly make a turn higher next week after beef packers turned more aggressive buyers of cattle this week. Others remain cautious.
 
There were also varied opinions about the direction wholesale pork prices would take next week. Some said they expect prices to stabilize and begin a gradual recovery while others foresee further weakness through most if not all of next week.
 
A few sources said because the meat and poultry markets have been driven more by strong demand than by supply factors throughout the year so far, then demand will likely continue to determine what wholesale meat prices do throughout the summer, barring any unforeseen circumstances such as another case of bovine spongiform encephalopathy, or mad-cow disease, in North America.
 
THIS WEEK¡¯S ESTIMATED SLAUGHTERS, COMBINED MEAT PRODUCTION
 
Cattle slaughter this week was estimated at 699,000, compared with 693,000 a week ago and 661,000 during the Memorial Day holiday-shortened workweek a year ago. Year-to-date cattle slaughter is estimated at 13.192 million head, down 7.8% from a year ago.
 
Hog slaughter this week was estimated at 1.877 million head, compared with 1.895 million last week and 1.513 million a year ago. Year-to-date hog slaughter is estimated at 41.383 million head, up 2.8% from a year ago.
 
This week¡¯s combined meat production - for beef and veal, pork and lamb/mutton - was estimated at 888.9 million pounds, versus 887.0 million last week and 790.8 million a year-ago.
 
Broiler slaughter this week was estimated at 160.752 million head, compared with 159.896 million a week ago and 141.722 million a year ago.
 

Source: USDA