UNITED STATES-FOOD CHECK ON MEAT PRICES.
While supermarkets and neighborhood grocers across
the country are putting the final touches on their traditional Easter and
Passover promotions, meat buyers are looking beyond the holiday to increased
sales of grilling cuts.
This week’s printed advertisements included a wide selection of beef, pork
and chicken cuts along with several varieties of bone-in and boneless hams.
"There’s something for everyone" in the store flyers and newspaper inserts,
an analyst said. For many households, ham is a favorite meat item for the
Easter meal. A traditional Jewish meal for the observance of Passover is lamb,
but beef brisket and chicken are also popular.
The products needed for the holiday promotions are already purchased and most
are in the stores. Grocers’ meat buyers are now negotiating with suppliers on
meat and poultry items for delivery later in April and into early May.
Beef
Various ground beef products were the most widely featured items from the
category on the front pages of the advertisements this week, according to the
Dow Jones Newswires 10-city survey. There were a few steaks, roasts and
briskets as well but many grocers used the lower-priced ground beef items to
attract more shoppers into their stores.
Many grocers promoted steaks and roasts as sub-features in the middle pages
of the printed advertisements. The retailers hope to sell more of these
premium-priced items this week and weekend since shoppers tend to be willing to
spend more for food at the beginning of the month.
Most retailers didn’t load their meat cases and coolers with large amounts of
the premium steaks because they remain cautious about the overall movement of
these higher-priced items, analysts said.
The economic crisis has caused consumers to cut back on spending overall and
purchase fewer of the premium-type products, said Bruce Longo, an analyst with
Urner Barry’s Yellow Sheet. Therefore, the stores are ordering conservatively
and maintaining smaller inventories of the premium cuts to avoid an overrun on
supplies.
The choice/select beef spread, which typically is a positive figure and
reflects a premium in choice grade beef, turned negative for four consecutive
days through Tuesday. Analysts said the aberration in the spread illustrated
slowed demand for the premium cuts and reduced sales of choice beef to
restaurants and food-service operations.
Some packers have been offering certain cuts at discounted prices despite
reduced production last week resulting from an early-spring blizzard in the
Plains. Several beef plants were forced to trim production late in the week.
For mid-April and into May, grocers are expected to gradually increase the
number of grilling items in their advertisements while reducing the counter
space devoted to roasts. The transition coincides with the arrival of warmer
temperatures, which encourages more backyard grilling.
Beef processors are reportedly asking fully steady to higher prices for loin
and rib cuts, which are mainly used to produce the premium steaks. Buying
interest for these cuts and other grilling items is expected to improve, even
if the economy remains weak. Many families may forego a more expensive dine-out
meal in favor of a good quality but cheaper meal prepared at home.
The average price of the 15 cuts of beef in the Dow Jones Newswires survey
this week was $3.72 a pound, compared with $3.75 a week ago and $3.82 a year
earlier.
Pork
This week’s pork features included items from across the category and
included a mix of bone-in and boneless cuts. Retail prices points overall were
considered reasonably attractive but analysts said there were few "hot deals"
in the mix to catch the eye of shoppers and encourage them to stock up.
Analysts and meat distributors said grocers are promoting more spareribs for
at least a couple of reasons. Supplies are readily available at attractive
prices, and the arrival of warmer temperatures, especially in the southern
two-thirds of the country, is encouraging more people to fire up their backyard
grills.
In addition, spareribs can be cooked either in the oven or on a grill, which
makes them a flexible meal option should the spring weather not cooperate with
plans to grill out.
Buying interest from grocers for pork cuts in recent days has been described
as slow to nearly stagnant for some items. Back-to-back steep losses in
wholesale pork prices pulled the cutout value quote down to a four-month low
Wednesday.
Also, observance of the Easter holiday this year on April 12 is about a month
later than last year. By this time a year ago, grocers were gearing up more
toward the beginning of the grilling season, plus the economy was much
stronger, so the buyers were booking more pork and other meat cuts for forward
deliveries.
Some analysts and brokers predict that wholesale pork prices could turn
higher within two weeks and that hog supplies will tighten further. That
combination could spark additional buying interest for deliveries into May and
push wholesale prices up further, they said.
The 13 cuts of pork in the survey averaged $2.16 a pound, versus $2.20 last
week and $2.07 a year ago.
Poultry
Leading the poultry features this week were boneless/skinless and bone-in
breasts at prices below the week-ago and year-ago averages. Some whole birds
and leg-quarters were included as well.
Chicken supplies are generally considered to be in balance with the current
level of demand, which has allowed prices to be hold about steady over the past
several weeks. The U.S. Department of Agriculture’s quotes on Wednesday for
deliveries into the northeast U.S. showed prices were also near the year-ago
level for the breast cuts while leg-quarter prices have been flat recently but
trailed the year-ago quotes by about 8 cents a pound.
Demand for broiler chicken is expected to improve into late April and May,
which should result in firmer prices, analysts said. Leg-quarter prices also
are forecast to move up and may do so earlier and faster than the breast meat,
according to some observers. Expectations of increased export sales interest
for the leg-quarters could push prices up, they said.
Processors continue to hold the line on production. In the latest six weeks,
placements of broiler eggs into incubators in the 19 largest producing states
have averaged 93% of a year ago, according to USDA. Last week’s egg placements
will hatch in late April, and the birds will reach slaughter size around early
June.
The four cuts of chicken had an average price of $1.39 a pound, compared with
$1.41 a week ago and $1.47 a year ago.
