November 17, 2008
Wholesale US beef prices slip but extend weekly gains
Wholesale beef prices declined slightly Friday (November 14) but extended the weekly gains initiated in late October while the pork market was choppy but ended the week nearly flat with a week ago.
Buying interest among the hotel/restaurant sector and grocers for premium beef cuts to be used in December holiday promotions fuelled gains in the primal beef rib and loin cuts throughout most of the week. The primal rib is used to make products such as prime rib or standing rib cuts. From the primal loin come products such as T-bones, porterhouse steaks and fillet mignon from the tenderloin.
Reduced cattle slaughter rates also have helped lift beef prices. Slaughters during the past three weeks have averaged about 25,000 head below a year ago for a decline of nearly 4 percent.
The US Department of Agriculture's choice beef carcass composite price during the final quarter last year hit a top of US$151.34 in the final week of November. The choice cutout Friday was reported at US$157.02, up US$14.21, or 10 percent, from a year ago.
Wholesale pork prices during October fell US$11.83, or 16 percent, and have declined another US$5.76 so far in November. Friday's quote for the pork carcass value was US$56.41, compared with US$58.05 a year ago.
Market analysts said slower export sales resulting from the world economic crisis and a stronger dollar against most other currencies have left more of the pork to be absorbed in the domestic market. The additional supplies have weighed on prices.
Still, some analysts and livestock dealers predict that hog and pork prices may be near a seasonal bottom amid speculation that supplies have peaked and could begin to tighten modestly in the weeks ahead. Also, the low wholesale prices could spark additional feature business for pork into December, they said.
In other news, the USDA this week reported total pork exports for September at 163,055 tonnes, up 61 percent from a year ago. Year-to-date exports are up 70 percent. Total beef exports for September were 98,640 tonnes, 47 percent above the same month year-ago figure. Beef exports through the first nine months were up 33 percent in volume and 45 percent in value from a year ago.
Last week's cattle slaughter was estimated at 616,000 head, compared with 621,000 a week ago and 647,000 a year ago. Year-to-date cattle slaughter is up 0.2 percent from a year ago.
Hog slaughter estimate was 2.310 million head, compared with 2.307 million a week ago and 2.372 million a year ago. Year-to-date slaughter is up 7 percent.
The USDA estimated total beef, pork and lamb production for last week is at 954.1 million pounds. The previous week's output was 958.9 million pounds, and the year-ago figure was 997.8 million pounds. Year-to-date combined meat output is up 3.3 percent.
Broiler/fryer slaughter this week was estimated at 160.214 million head, compared with 163.184 million a week ago and 167.330 million a year ago.