September 22, 2008


US wholesale meat prices stable in week amid economic concerns



US wholesale meat and poultry prices were stable last week and in some categories even moved up modestly despite widespread economic concerns that sent stock prices tumbling early in the week before they later rallied.


Boxed beef prices for the week were generally flat, with the choice grade quote off just US$0.77 per hundredweight. Select was down US$0.53 for the week. Meanwhile, the wholesale quotes for pork and chicken were modestly higher. USDA's pork quote Friday (September 19) was US$76.66, up US$0.92 from the previous week. Chicken breast prices on a delivered basis into the northeast US gained five to 10 cents per pound.


The Dow Jones Industrial Average from Monday through early Thursday fell 8.6 percent from last Friday's close as it shed 982 points to hit a 34-month low. During the steep slide in stock prices, some livestock and meat market analysts expressed concern that widespread worry about the economy might cause consumers to alter their purchases, particularly of the higher-priced beef middle meats cuts, such as premium steaks. There were reports of slowed buying of those cuts by grocers, who were taking precautions by limiting their inventories of the high-priced cuts.


The concerns eased somewhat late in the day Thursday as stock prices rebounded and recovered most of Wednesday's steep losses. Further gains on Friday pulled the DJIA near the previous week's close. The DJIA closed Friday down just 0.3 percent from September 12.


Some market analysts said it may be too early to gauge consumer sentiment using wholesale meat prices. Much of the meat is sold through forward bookings, so packers likely had most of this week's production sold ahead and there hasn't been enough time yet for inventories to starting backing up in the holding coolers.


Others said the rebound in stock prices may keep consumers from reacting much to lower prices early in the week.


Last week's cattle slaughter was estimated at 686,000 head, compared with 657,000 a week ago and 647,000 a year ago. The year-to-date cattle slaughter is up 0.9 percent from a year ago.


The year-to-date hog slaughter is up 8.5 percent.


The USDA estimated total beef, pork and lamb production for last week at 1.001 billion pounds. The other week's output was 968.8 million pounds, and the year-ago figure was 962.5 million pounds. Year-to-date combined meat output is up 4.4 percent.


Broiler/fryer slaughter this week was estimated at 166.064 million head, compared with 167.637 million a week ago and 170.377 million a year ago.

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