CHICAGO May 3 U.S. wholesale beef prices rose to
an all-time high on Friday as the delayed spring grilling
season is heating up and as supermarkets buy meat for the May
27 U.S. Memorial Day holiday weekend, commonly seen as the
unofficial start of the summer cookout season, analysts said.
The cold soggy start to spring put outdoor cookouts on hold
throughout most of April, but temperatures are seen climbing in
the coming weeks, prompting grocers to stock up for a seasonal
bump in sales of steaks, burgers and other cookout favorites.
The U.S. Department of Agriculture on Friday reported the
wholesale price for choice beef, commonly called the cutout, at
$201.68 per 100 lbs (cwt), eclipsing the previous record of
$201.18 set on Oct 16, 2003.
"You're now finally getting the seasonal rally occurring for
beef that's about three-weeks late getting started," said
Chicago-based Linn Group analyst John Ginzel.
"I suspect some retailers are booking product for Memorial
Day features," he said.
National Cattlemen's Beef Association (NCBA) weekly retail
scanner data shows Memorial Day ranks third in weekly holiday
beef retail sales at about $370 million, behind U.S. Labor Day
sales of $380 million. The U.S. July Fourth holiday is No. 1 at
around $400 million.
Record-high wholesale beef prices could increase even more
the lofty beef prices at grocery stores, analysts said.
The average retail beef price in March hit a record $5.30
per lb, surpassing the previous record of $5.15 in November,
according to the government's Economic Research Service.
"The cutout's explosion to a new record puts us in pretty
rarified air. That increases the chances of push back by
retailers against higher prices," said Oak Investment Group
president Joe Ocrant.
"Conversely, the cattle numbers are at their lowest in more
than 60 years and the grilling season is just getting underway,
postponed by the bad spring weather," he said.
A prolonged dry spell in the U.S. southwest, which followed
a historic drought in the Plains, damaged pastures. The lack of
moisture drove up feed costs and shrunk the herd to its smallest
in 61 years.
Armed with the knowledge that consumers were keeping a close
watch on their purse strings, the NCBA, funded by the Beef
Checkoff Program, is doing its part to ensure that beef stays on
"There are a variety of products and price points that will
fit anyone's budget. Regardless of what beef prices do, there
are still a lot of cost savings options for Americans to include
it in their diet," said NCBA's Trevor Amen.
Traditional grilling items, such as filets, ribeyes,
tenderloins and ground beef, will remain the top cuts, he said
but there will be mid-price items like flat iron and ranch cuts