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Weekly North American market update 29 Jan 2010

In US wholesale markets, it has been a broad "down-week" for red meats, though chicken prices appear to have stayed steady.
Weekly North American market update
By Graeme Goodsir
 
The USDA's 12-city average price index at 82c-lb for whole chickens - and with financial market analysts giving higher ratings for Tyson shares on the basis of expected chicken price improvement. The huge International Poultry Expo show being held this week in Atlanta, Georgia, appeared to have a moderately upbeat tone, albeit some concerns whether Russia and EU will continue to restrict imports of US chicken.
 
 
The constantly-rising US wholesale pork market in past two months suddenly has "lost wind from its sails," with carcass cut-out value dropping to 70.6c/lb today - down a full 8c/lb from last week's peak of 78.6c - with daily hog slaughter mostly above 420,000 head (except for a drop but today's national kill was back to 428,000 head).
 
Wholesale prices for fed beef also posted declines during past week - Choice-grade carcass cut-out value is down 5c/lb (to 140.5c) and Select-grade is down 4c/lb (to 137.0c), with the spread between them now narrower at 3.5c/lb - indicating either more plentiful supply of marbled beef, or else weaker consumer demand - with the latter being possible - accompanied by lower forecasts for US restaurant sales in the year ahead.
 
The US retail food sector also is looking more bearish. The Sams Club group (subsidiary of Wal-Mart) announced it will shed 11,000 jobs - extending beyond the recently-announced closure of many under-performing stores.   It is noticeable - with job losses hurting many US
family families - that charity food pantries are under growing pressure to give out more food to needy people (including many who still have jobs) and over 10% of the US population is now receiving government food stamps from USDA - for use to redeem retail food purchases.
 
The edge has also gone off ground beef sales during past week - some grinders are now working 4 to 5-day weeks (they had been up to 6 days post-New Year holiday period, with the novelty seemingly wearing off the US$1.00 double cheeseburger specials at some fastfood hamburger chains. (Burger King is being sued by its franchisees to cease this US$1.00 special, on which they are losing money in store sales - some of them are promoting the inclusion of bacon slices for an extra 70c - make a US$1.70 price). 
 
The value of 90CL fresh boneless cow material has eased this week below 150c-lb (with US cow slaughter having been high in past week, up to 28,000 head on some days - from a normal 25,000 and the cow canner-cutter carcass cut-out value is down 1.7c this week, to 115.4c/lb - after 6 consecutive weekly rises. In the meantime, trade in imported 90CL frozen cowbeef has "gone off the boil," with processors now afraid to bid "out-front" and sellers in Australia-New Zealand finding CIF offers difficult.
 
Two main issues being addressed this week at the annual convention of US National Cattlemen’s Beef Association are a major change in NCBA governance (to create a smaller board of directors, from the current unwieldy number of 278 people) and to devise a major public relations campaign to counter negative public images of the US cattle industry being generated by animal rights activists like HSUS and PETA, and by well-funded anti-agriculture interests. The NCBA convention runs from Jan 27 through this Saturday, Feb 3.
 
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