050714 U.S. Beef Prices Fall Again; Pork Up

Kansas City, KS - U.S. boxed beef prices have fallen for eight consecutive days while the pork cutout, a composite value of the primal cuts making up the pork carcass, has been higher in eight of the last 10 days.

Temperatures across much of the country may be a factor affecting both of these markets but with different results.

The U.S. Department of Agriculture's choice beef carcass composite value has declined $8.27, or 6.1%, in the past eight days. Friday's quote, at $126.97, was down nearly 7% from the year-ago figure.

The pork cutout for Friday was quoted at $70.85, lower on the day but up $4.63, or 7.0%, from two weeks ago.

Livestock and meat analysts this week said consumers living in the areas where temperatures have been very hot the past week or so the likely have reduced the amount of meat and other heavier foods they eat. Instead, more salads, cold cut or deli sandwiches and fast-food meals are probably being consumed. That may be contributing to the weakness in wholesale beef prices, the analysts and market sources said.

Some said beef prices may have been weaker, anyway, without the blazing heat, but the hot temperatures have not have helped demand any, either.

Meanwhile, the heat has slowed hog growth and daily marketings, so hog slaughter is lighter, and packers have been able to get more for the pork.

Also, a smaller percentage of the pork carcass is consumed as fresh meat than the beef from cattle.

Bellies, hams and trimmings, which make up nearly half the pork carcass, are used in further processed items such as bacon, smoked hams and sausage products. These products have considerably longer shelf lives than do fresh meats so are affected less by temporary declines in sales. Also, processors can store these cuts in freezer warehouses for later use if necessary whereas most of the beef carcass is sold as fresh meat.

Pork exports also could be a significant factor in holding up hog and pork prices. University of Missouri agricultural economists Ron Plain and Glenn Grimes in last week's hog outlook said U.S. pork exports for the first five months of the year amounted to 13.3% of production, up from 10.7% from the same period in 2004. Net exports, or exports less imports, are at a record high in modern history at 8.5% of production, up from 5.4% of production in 2004.

"Live hog prices for January-May would probably have been down 5-6% from 2004 rather than up nearly 10% as they were if pork exports and imports had not changed as they have from a year earlier," the economists said.

Cattle/Hog Slaughters

Cattle slaughter this week was estimated at 653,000 head, compared with 652,000 a week ago and 646,000 a year ago. Year-to-date cattle slaughter is 17.629 million, down 3.2% from 18.218 million a year ago.

The week's hog slaughter was estimated at 1.869 million, versus 1.872 million a week ago and 1.879 million a year ago. The year-to-date hog slaughter was estimated at 55.813 million head, down 0.4% from 56.031 million a year ago.

Total Meat Production

The USDA estimated total beef, pork and lamb production for the week at 876.7 million pounds, compared with 875.9 million last week and 862.4 million a year ago. Year-to-date combined meat output is down 0.5% at 24.690 billion pounds.

Young chickens slaughtered under USDA inspection for the week totaled 170.508 million head, compared with 168.451 million a week ago and 161.269 million a year ago.

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