November 13, 2008
Economy slump urges US to demand for pork as cheaper alternative
Hog prices rose for the first time in three days on speculation that the economy downturn is boosting US demand for pork as a cheaper alternative to beef as cattle futures decline.
Yesterday, the price of wholesale pork was almost US$0.97 per pound less than wholesale beef, the biggest discount in 19 months, according to government data.
US meatpackers sold 5.1 million pounds of pork yesterday, the highest amount in a week, and 2.8 million pounds of beef, a one-month low.
Hog futures for December settlement increased 0.475 US cents, or 0.9 percent, to 55.45 US cents per pound on the Chicago Mercantile Exchange. The price has dropped 4.2 percent this year.
Wholesale pork gained 1.16 US cents, or 2 percent, to 58.04 US cents per pound yesterday, according to the USDA. The price is down 6.6 percent this month.
Wholesale choice beef increased 2.86 US cents, or 1.9 percent, to US$1.5754 per pound at midday today, USDA data show. Beef has gained 11 percent in November. Beef sold for US$1.5468 yesterday, leaving a 96.64-cent price difference from pork that was the biggest since April 18, 2007.
US meatpackers shipped 70.3 truckloads of beef yesterday, the lowest amount since October, 13. Pork shipments totaled 127.8 truckloads, the most since November 4. Each load of beef and pork weighs 18.14 tonnes.
Cattle futures for February delivery declined 1.075 US cents, or 1.2 percent, to 91.725 US cents a pound in Chicago. The price has dropped 4.6 percent this year.
Feeder-cattle futures for January delivery fell 0.975 US cents, or 1 percent, to 96.225 US cents a pound on the CME. The most- active contract is down 10 percent this year.
US equities tumbled for a third day, amplifying concern that beef demand will shrink. The Standard & Poor's 500 Index dropped as much as 5 percent and is down 42 percent this year.