Low Confidence Moves Buyers Off Wholesale Markets

US - Convinced that prices will fall further, meat buyers are backing away from wholesale markets this week, which exacerbating market problems. They are expected to return in the run up to Easter, but low confidence in the US economy is forcing caution for the long term.
calendar icon 14 March 2008
clock icon 3 minute read
Lester Aldrich,of Dow Jones, writes that retail buyers are fairly certain of increasing demands for grillable meat cuts as spring approached. Troy Vetterkind, director of livestock analysis and trading at Vetterkind Cattle Brokerage says that confidence is strong enough to book large volumes of red meat and chicken for April, but after that things are more uncertain.

Buyers want to see evidence of pent-up demand and they is some confidence that post-Easter grilling demand will heat up, he adds.

Economy Concerns

Many market analysts believe retailers are concerned about the effects of a weak US economy and forecasts for very high fuel prices this summer on the buying habits of consumers. They fear shoppers will make budget compensations at the meat counter.

The move away from the wholesale markets is depressing red meat and poultry prices, further reinforcing the wisdom of the move to meat buyers and increasing the pain of packers facing lower product prices, the analysts said.

Retail grocers may offer more beef in the weeks following the Easter holiday, and pork also may hold its own in the weekly newspaper supplements. There is substantial interest for high-end pork cuts and product is available at very attractive levels at this time of year. However, as with beef, retail buyers are backing off just in case consumption does not rise post-Easter.

The average price of the 13 cuts of pork in this weeks Dow Jones Newswires survey was $2.23 per pound, compared with $2.10 a week ago and $2.17 a year ago.
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