United States-Fear in the meat market.

UNITED STATES-Fear has the entire meat market in its grip from the consumer back to the farm and ranch community.

As a result, it’s more difficult than usual for retail grocers or anyone in the wholesale chain to take risks, and the market has gone to a hand-to-mouth buying pattern, said Bruce Longo, market analyst with Urner Barry’s Yellow Sheet. Buyers also are picking off bargains in the spot markets to fill their advertising needs.

To get through the winter doldrums, retail grocers are playing it safe with

their meat advertising, hoping for a change in consumer demand but not really

expecting anything. Advertised meats in weekly newspaper supplements often are

not prominently displayed and offer a broad mix of product from which consumers can choose.

From week to week, the emphasis may change a little, but in the broad

spectrum of things, the advertisements retain a broad-based approach to meeting consumer desires.

Increased cattle slaughter rates and the resulting rise in beef production is causing some problems for packers who appear to be having trouble selling enough product to keep their coolers clear of inventory, Longo said.

There is very little speculation in the market, he said. Retail and secondary

buyers aren’t willing to take on that extra load of product, even though it

might be at a historically attractive price because their chances of reselling

it at a profit have declined. Or at least they’re afraid they have declined.

Reinforcing those decisions to forego that extra speculative load is the

slow, downward creep of wholesale prices, Longo said. This makes it better to

come back into the market for an occasional load that might be needed after a

heavier-than-expected sales week, not that this ever happens, they said.

Retail grocers like to be surprised with a heavy sales week from time to

time, but it has been a long time since this has happened, and they’re leery of

expecting a hot sales week.

This week’s Dow Jones Newswire survey of retail grocery advertisements looks

like grocers are stumping beef steaks aggressively. The reality, though, is

that steaks are available in most cities, but they rarely are on the front

pages of the weekly advertising supplements.

Beef steak prices aren’t jaw-dropping either, although there were declines

from a week ago in the T-bone and strip steaks. Roasts appeared to be

less-heavily advertised, and prices generally were up except for the tri-tips.

Troy Vetterkind, director of livestock analysis and trading for Vetterkind

Cattle Brokerage, said beef is moving through the stores, and occasionally

there are some loss-leader type prices, but there is no pattern to consumer

demand. The lack of a pattern adds to market uncertainty and keeps retail meat

buyers in a hand-to-mouth pattern, he said.

Wholesale beef markets currently are sluggish after buyers placed their

orders a week or two ago, Vetterkind said. At current usage rates, buyers won’t

be back in to book product for another week.

Meanwhile, beef prices could decline even more than this week’s $4.00 per

hundredweight and take the U.S. Department of Agriculture’s choice beef cutout

price down to around $140. At midday Thursday, it was listed at $144.21.

The average price of the 15 cuts of beef in the Dow Jones Newswires survey

was $3.85 a pound, compared with $3.85 a week ago.

Just because wholesale pork prices are below those of beef doesn’t mean

retail meat buyers are more willing to take a chance on an extra load or two,

market analysts said. To the contrary, many are playing the same hand-to-mouth

routines with pork as they are with beef.

The Dow Jones Newswires survey showed grocers were advertising a variety of

loin and butt items but that prices didn’t stand out as being particularly

aggressive.

Vetterkind said that, as with beef, grocers were moving a lot of product into

consumer hands, but it wasn’t enough to turn the tide of the market upward.

Retail buyers were worried about product demand, Vetterkind said. Until

inventories at the packers get worked down, buyers will remain cautious, he

said.

But Jim Kenney, market analyst at the Yellow Sheet, said some buyers were

talking about possibly taking a chance on some butt products for upcoming

advertisements. Prices were seen as a value, he said.

The average price of the 13 cuts of pork in the Dow Jones Newswires survey

was $2.32 per pound, compared with $2.03 a week ago and $2.36 a year ago.

Among the variety of meat products being advertised by grocers this week, all

cities in the Dow Jones Newswires survey had boneless/skinless chicken breasts.

Prices generally were at historically attractive levels, too.

Leg quarter and split breasts were offered in about half of the cities.

Market analysts said grocers wanted to present shoppers with a lower-priced

item that might fight cash-strapped budgets at the end of the month.

Chicken producers continue to cut back on production, killing 148.579 million

birds in the latest week compared with 160.046 million a week ago and 159.983

million a year ago, according to U.S. Department of Agriculture figures. For

the year to date, 475.441 million chickens have been slaughtered, down from

496.662 million in the same period a year ago.

That reduced production is helping to support wholesale prices, the analysts said.

This is the largest demand week of the year for chicken wings, but after the

Super Bowl parties this weekend, wing demand likely will decline, the analysts said.