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From today's Houston Chronicle......
Good news, bad news: Beef prices to fall this summer
By NELSON ANTOSH
Copyright 2004 Houston Chronicle
The cow that stole Christmas from the nation's beef producers threatens to pick more pockets this summer.
The discovery of a single mad cow case in late December in Washington caused 65 countries to shut their borders, slashing export sales and putting an end to strong prices received by cattle feeders and ranchers.
A further downward push on prices is expected this summer when a normal seasonal buildup in beef supplies hits a marketplace lacking the safety valve of exports. There will be an oversupply of beef in the United States during the months ahead that could depress prices even more, according to experts meeting Tuesday at the International Livestock Congress at the Warwick Hotel.
Fattened cattle going for close to 80 cents a pound were expected to fetch about $1 a pound, said Randy Balch, head of Cattle Fax, a marketing information organization in Englewood, Colo.
However, this hasn't necessarily translated into lower prices for consumers. From Dec. 22 to Feb. 22, the wholesale price of cuts like ribs fell 31 percent, chuck dropped 19 percent, and round slipped 9 percent. However, some other cuts rose in price as cattle prices fluctuated wildly.
The lower prices should start showing up soon in specials, Balch said.
The nation's net beef supply, which takes into account the effect of exports and imports, is expected to grow from about 500 million pounds a week during the first part of this year to between 550 million and 570 million pounds during May, June and July.
Until exports were cut off, Balch said, these sales were the equivalent of 45 million pounds a week. By the middle of July, "we could be drowning in meat," said Rod Bowling of the Smithfield Beef Group, a participant in Tuesday's international summit on bovine spongiform encephalopathy.
The real test of consumer demand will start in May, Balch predicted.
Thus far it has remained surprisingly strong, according to surveys.
Consumer demand was expected to drop possibly as much as 40 percent based on what happened during mad cow outbreaks in Japan and Europe, said Terry Stokes, chief executive of the National Cattlemen's Beef Association.
The mad cow issue has given activists a platform to push their anti-beef agenda, he said, and politics is trumping science at the same time.
While demand for mainstream beef cuts has remained strong, the demand has plunged for items such as beef tongue that are little consumed in the United States but are big foreign sellers. The industry is looking for a home for 101 million pounds of tongue, said Paul Clayton of the U.S. Meat Export Federation.
And liver is so cheap that Smithfield is giving it away to firms that pay for the freight and packing cost, Bowling said, because the company doesn't want to put the liver into landfills.
Meat and bone meal, a byproduct of slaughtering old cows, "fell basically to the value of coal," Bowling said.
With one or two exceptions, borders aren't expected to reopen to the United States any time in the near future.
Mexico is said to be days away from reopening its borders to U.S. beef, but skeptical speakers at the gathering said they heard that a month ago. Poland, an important buyer of tripe, is officially open, but nothing is being shipped because of the certifications required to get it into the country.
Thirteen countries that lifted their bans against Canada came back as strong or stronger than before, said Dennis Laycraft, head of the Canadian Cattlemen's Association.
Japan has asked that the brain of every cow slaughtered be tested for prions, which cause bovine spongiform encephalopathy. So many cattle are slaughtered in the United States that this could cost taxpayers $3.5 billion per year if the tests are done at the national laboratory in Ames, Iowa, said Gary Smith, a meat scientist from Colorado State University and moderator of the sessions.
Speakers suggested this money could better be spent on diseases that are a real health threat. The U.S. Department of Agriculture's lead veterinarian compared testing every animal slaughtered to testing every man, woman and child in the United States for prostate cancer, Smith said.
Good news, bad news: Beef prices to fall this summer
By NELSON ANTOSH
Copyright 2004 Houston Chronicle
The cow that stole Christmas from the nation's beef producers threatens to pick more pockets this summer.
The discovery of a single mad cow case in late December in Washington caused 65 countries to shut their borders, slashing export sales and putting an end to strong prices received by cattle feeders and ranchers.
A further downward push on prices is expected this summer when a normal seasonal buildup in beef supplies hits a marketplace lacking the safety valve of exports. There will be an oversupply of beef in the United States during the months ahead that could depress prices even more, according to experts meeting Tuesday at the International Livestock Congress at the Warwick Hotel.
Fattened cattle going for close to 80 cents a pound were expected to fetch about $1 a pound, said Randy Balch, head of Cattle Fax, a marketing information organization in Englewood, Colo.
However, this hasn't necessarily translated into lower prices for consumers. From Dec. 22 to Feb. 22, the wholesale price of cuts like ribs fell 31 percent, chuck dropped 19 percent, and round slipped 9 percent. However, some other cuts rose in price as cattle prices fluctuated wildly.
The lower prices should start showing up soon in specials, Balch said.
The nation's net beef supply, which takes into account the effect of exports and imports, is expected to grow from about 500 million pounds a week during the first part of this year to between 550 million and 570 million pounds during May, June and July.
Until exports were cut off, Balch said, these sales were the equivalent of 45 million pounds a week. By the middle of July, "we could be drowning in meat," said Rod Bowling of the Smithfield Beef Group, a participant in Tuesday's international summit on bovine spongiform encephalopathy.
The real test of consumer demand will start in May, Balch predicted.
Thus far it has remained surprisingly strong, according to surveys.
Consumer demand was expected to drop possibly as much as 40 percent based on what happened during mad cow outbreaks in Japan and Europe, said Terry Stokes, chief executive of the National Cattlemen's Beef Association.
The mad cow issue has given activists a platform to push their anti-beef agenda, he said, and politics is trumping science at the same time.
While demand for mainstream beef cuts has remained strong, the demand has plunged for items such as beef tongue that are little consumed in the United States but are big foreign sellers. The industry is looking for a home for 101 million pounds of tongue, said Paul Clayton of the U.S. Meat Export Federation.
And liver is so cheap that Smithfield is giving it away to firms that pay for the freight and packing cost, Bowling said, because the company doesn't want to put the liver into landfills.
Meat and bone meal, a byproduct of slaughtering old cows, "fell basically to the value of coal," Bowling said.
With one or two exceptions, borders aren't expected to reopen to the United States any time in the near future.
Mexico is said to be days away from reopening its borders to U.S. beef, but skeptical speakers at the gathering said they heard that a month ago. Poland, an important buyer of tripe, is officially open, but nothing is being shipped because of the certifications required to get it into the country.
Thirteen countries that lifted their bans against Canada came back as strong or stronger than before, said Dennis Laycraft, head of the Canadian Cattlemen's Association.
Japan has asked that the brain of every cow slaughtered be tested for prions, which cause bovine spongiform encephalopathy. So many cattle are slaughtered in the United States that this could cost taxpayers $3.5 billion per year if the tests are done at the national laboratory in Ames, Iowa, said Gary Smith, a meat scientist from Colorado State University and moderator of the sessions.
Speakers suggested this money could better be spent on diseases that are a real health threat. The U.S. Department of Agriculture's lead veterinarian compared testing every animal slaughtered to testing every man, woman and child in the United States for prostate cancer, Smith said.