NW_LS850 Des Moines, Iowa Friday, August 22, 2008 USDA Market News National Carlot Meat Trade Review Week Ending: Thursday, August 21, 2008 CARCASS PRICE EQUIVALENT INDEX VALUES The carcass price equivalent index value of a Choice 600-900 lbs carcass dn 2.03 at 149.78; Select 600-900 lbs carcass dn 1.24 at 143.53 compared to last Friday. FABRICATED BOXED BEEF CUTS AND BEEF CUTOUT VALUE After two weeks of advancement cutout values were lower on light to moderate demand and moderate to heavy offerings with the majority of Labor Day buying now completed. Rib and loin cut inventories continued to expand with Choice lip-ons in particular being discounted late in the week to stimulate clearance. Chuck and round cuts traded mostly steady with the exception of some Choice round items modestly depreciating. Forward business was fairly slow although a notable package of Choice boneless chuck traded below current spot levels. Beef trimmings traded generally steady on light to moderate demand and offerings. The fresh 50s weighted average price has now exceeded a dollar a pound for 9 consecutive business days; longer than any other recorded stretch for this item. Fed cattle and blended coarse grinds were firm on moderate demand and light to moderate offerings. For the week: Choice rib primal 13.00 lower, while Select 7.00 lower; Choice and Select chuck primal steady to 1.00 higher; Choice and Select round primal steady to 3.00 lower; Choice and Select loin primal 3.00 to 6.00 lower; Beef trimmings 1.00 lower; Fed cattle and blended grinds mostly 1.00 to 3.00 higher. Composite of Boxed Beef Cutout Values: Choice 600/900# carcasses down 2.81 at 161.52; Select 600/900# carcasses down 1.28 at 156.48. COW AND BULL CARCASS, BONELESS PROCESSING BEEF, CUTTER COW CUTOUT Lean boneless beef was steady to weak on moderate demand and moderate to heavy offerings. A higher undertone was felt early in the week, but with cow harvest numbers at near capacity levels, packers priced product accordingly to keep inventory levels manageable. 100% lean items were higher again this week, mainly due to the Brazilian situation that occurred a few weeks ago. The lightly tested import beef market continues with a weak undertone. Many end users have taken a wait and see approach and are purchasing product on an as needed basis. The global demand for Australian beef coupled with the weak U.S. dollar continues to divert product normally bound for U.S. ports and directs it to other countries such as Japan, Korea, and the Eastern European areas. Cow cuts were mixed this week as end meats were higher and middle meats were lower on light to moderate demand and offerings, although cow tenderloins had price improvement compared to last week. Prices on 100% lean combo items were sharply higher except for eye of rounds trading steady. Demand for most 100% lean items was good on light to moderate offerings. Lean boneless beef 92-94% steady; 90% steady to weak; 85% mostly steady; 81% steady to 1.00 lower; 75% 6.00 to 9.00 higher; 73% not established; 65% steady to weak. 100% lean combo items mostly 6.00 to 9.00 higher except for eye of rounds trading steady. Cutter cow carcass gross cutout value for Thursday, August 21, 2008 was estimated at 140.04 per cwt, dn 0.52 when compared to last Friday. CARLOT PORK AND PORK CARCASS CUTOUT VALUE After setting the modern day record for the estimated pork carcass cutout last Friday, the tide turned by mid-week as buyers resisted many of those trading levels for the individual cuts. Prices for retail cuts followed the above trend as supplies began to amass for many sellers by week’s end. Bone- in hams price levels were steady this week on light to moderate demand, mostly due to continued support from the export arena. At the same time, seedless belly and lean trim inventories became burdensome to most packers which pressured price levels sharply lower with moderate to heavy offerings and moderate demand. Some Bacon slicers have reduced or halted production for a few weeks due to a combination of excess inventories and sluggish movement at the retail case. Sausage manufacturer’s bought at a steady pace as prices declined which allowed them to rebuild their frozen inventories. Along with that, with the end of the outdoor grilling season, approaching production for these items has slowed. Fresh loins 2.00 lower; butts 3.00-5.00 lower; spareribs 1.00-3.00 higher; skinned hams 17-20 lbs steady with the last quote, 20-23 lbs and 23-27 lbs steady; seedless bellies 14-16 lbs 11.00 lower; 42% trimmings steady; 72% trimmings 13.00 lower; boneless picnics 2.00-6.00 lower. The composite cutout value of 53-54% 200 lbs. hog carcass was estimated at $90.31 per cwt. dn 4.11 from last Friday. BY-PRODUCTS: VARIETY MEATS, TALLOWS, PROTEINS, AND HIDES Trading this week on beef variety meats was very slow with the exception of cheek meat. Traders were snapping up the available supplies of cheek meat. Product for the domestic market moved at steady prices in a thin test. Many loads for export moved rapidly at moderately higher prices on good demand. Other markets were thinly tested with most remaining untested. Buyers were reluctant to buy in quantity and many items were purchased in small quantities and used as load fillers or multi item loads. Trading on pork variety meat markets was slow to moderate this week. Markets were thinly tested in most cases. Light offerings prevailed and prices trended steady to higher on moderate demand. On sausage materials markets, cheek meat went untested on resistance to the sharply higher prices of last week. Domestic hearts went untested as well. However, demand from Canadian trading companies forced prices slightly higher on the export market. The few overseas sales were at mostly steady prices. Market activity on tallows and greases continued to be slow this week. Light chemical, soap and biofuel demand pressured prices slightly lower on both Chicago packer and renderer bleachable tallow. Chicago edible tallow was not tested this week. The Gulf markets were quiet. Central choice white grease ended steady while prices for yellow grease slid lower as the week progressed. Trading on protein feed supplements was also slow this week. Ruminant and pork meat and bone meal prices were higher this week, moving in concert with soybean meal. Central ruminant blood meal moved higher this week while pork blood meal traded at slightly lower money as demand and offerings were light. Major packer hides experienced another week of slow trading. Demand and offerings were light. Packers were holding firm while tanners were waiting for lower prices. Most of the week was stalled in a stalemate. In light tests, Heavy Native Steers ended the week steady. Beef variety meats: domestic cheek meat steady, export 3.00 higher; head meat not tested; domestic hearts not tested, export mostly steady; export select livers mostly steady; trepas 2.00 higher. Pork variety meats: neck bones mostly steady to 3.00 lower; tails mostly steady; domestic feet steady, export feet mostly steady; domestic hind feet 2.00 higher; domestic multi slashed hearts not tested, export 1.00 higher; cheek meat not tested; salivary glands 7.00 higher; partial lean snouts 4.00 higher; masked snouts 5.00 higher; domestic stomachs mostly 2.00 higher; belly skins no recent test for comparison. Central choice white grease steady; Central yellow grease steady to 1.25 lower; Chicago packer bleachable tallow <0.15 .50 lower; Chicago renderer bleachable tallow <0.15 .50 lower; Central meat and bone meal 2.00-10.00 higher; Panhandle meat and bone meal 6.50-12.00 higher; pork meat and bone meal 5.00-8.00 higher; Central blood meal 75.00-85.00 higher; pork blood meal 10.00 lower; Heavy Native Steer hides steady. The average value of hide and offal for the four days ending August 21, 2008 was estimated at 11.71 per cwt., down 0.04 from last week and up 2.02 from last year. NORTHEAST COAST AND NORTH CENTRAL VEAL CARCASS, CUTS The special fed veal carcass weighted average composite price decreased 2.71 on light demand and moderate to heavy offerings. Harvest numbers decreased nearly 3% for the week. Dressed weights were down 1.3 pounds in the Northeast and up 2.5 pounds in the North Central area with the composite up 0.9 pounds. Prices on veal cuts this week trended mixed. Movement was slow to moderate for moderate offerings and light to moderate demand. LAMB: CARCASS & PELTS Carcass lambs sales for the week, as of 8/21/2008 were mixed; 65#’s and down were unevenly steady; 65#’s and up traded 0.30 to 1.31 lower. Packer sorted green salted pelts steady. Demand was light to moderate for light to moderate offerings. Trading issues noted are the rising dollar value, the declining Australian dollar and seasonal quality on available pelts. Idaho pelts are expected to show in about 2-4 weeks. Source: USDA Market News, Des Moines, IA 515-284-4460 11:30c prl .