Newsletter

Processing

rss

Weekly North American market update 13 Nov 2009

It has been another mixed week for US meat and livestock markets, culminating with US Meat Export Federation commencing a bi-annual board of directors meeting tonight in Denver, Colorado, amid chaos surrounding US beef exports to Taiwan, where consumer protests (about distorted fears of BSE rules) are halting trade and causing temporary suspension of USDA export approvals for some beef shipments.
 By Graeme Goodsir
 
And at home, in Ohio state, "consumers spoke" at the ballot box a week ago on meat matters -by voting 64% to adopt a constitution change to create rules for livestock production standards. With other recent public outcries in US about E.coli 0157 and current ground beef recalls - and animal abuse in a calf slaughter plant - it seems that the US industry is facing momentous pressures ahead. On  a positive note, some short term economic relief was indicated with reports that  US livestock producers should not be burdened in immediate future with methane/ carbon emission taxes - at least not before the year 2011.
 
In wholesale markets, the past week was a down-turn - with fed beef and pork carcass cut-out values all declining near 2c/lb - in face of slow consumer demand. Choice-grade beef fell 2.1c to 139.8c/lb, Select-grade beef fell 2.1c to 133.7c/lb  (with the spread between them staying steady near 6c/lb) and the pork carcass cut-out value fell 2.2c to 57.1c/lb.  
 
In cash markets, fed cattle and hog values actually rose slightly during the past week (to ranges of 85-88c/lb and 35-38c/lb respectively) which meant packer margins got squeezed - the estimated slaughter margin for beef packers in week ended November 7 was near $18 per head loss. The latter number indicated tough times ahead for domestic beef sales, in the face of US national unemployment rate reaching 10.2% last week – the first time above 10% since 1983 - with near 14 million people seeking jobs, which remain elusive.  
 
Hamburger beef featured prominently and positively in the Food Section of today's main central Pennsylvania newspaper - a panel of local food specialists reviewed in detail (with photos - in full-page splurge) the merits of new up-market Angus burgers being promoted by four major fastfood restaurant chains - McDonald's,  Burger King, Wendy's and Hardee's - with the last-named getting most plaudits for its 1/3 pound "Original Thick Burger" -  priced at $3.69 (2 of the others were near $4.40 each.)  
 
Ironically, the big market-mover this week seems to have been Burger King's double cheese burger for $1.00 - which finally got moving after months of hesitation and preparation, to match other competitors.  Some grinders are now working 7 days weekly to keep up with patty movement - but the wholesale price of 90CL fresh boneless cowbeef actually declined 1 to 2c/lb in past week (to 125-126c/lb fob), due to a plentiful supply of "fall run" movement
of cull cows. 50CL fatty steer trim ingredient did rise in price - up 5c to 65c/lb.  
 
Imported frozen 90CL cowbeef was hardly an alternative raw material option for grinders, due to scarcity of spot supplies - US import arrivals have fallen in the past month due to currency problems facing Australian/New Zealand exporters, and the competitive pain of losing near 80,000 cattle per month to live export sales to Indonesia and other nearby Pacific markets. Import price for Aust/NZ 90CL cowbeef is nominally quoted today around 138-139c/lb fob (up 1 to 2c).
 
Chicken and pork stayed in the doldrums in retail sales - with boneless, skinless chicken breasts selling locally at a new low level of $1.28/lb (10lb package), and leg quarters down to 49c/lb - while ham and turkey prices for Thanksgiving promotions  were "all over the place" - dragging down beef prices also in some places.
 
This week, USDA announced adjustments to its 2009 U.S. harvest estimates for corn (reduced by 1%, due mainly to recent wet weather) and soybeans (up 2%). Futures contract markets reacted fairly logically - corn futures rose 10 to 12 cents (to range 394-419c per bushel) and soybean futures fell 20 to 30c (to 964-979c/bu). Expected higher feed costs (related to corn futures trend) caused slaughter cattle futures contracts to fall near 2c-lb (to range of 84-88c/lb) and feeder calves to fall  2.5c (to a range of 93 to 95c/lb live basis, through to April 2010 delivery dates).
 
*(For week ended Wednesday 11 Nov)
Click here to receive the latest news - Meat International newsletter

More Processing