U.S. wholesale beef prices fell this week, pressured by sluggish demand caused by the weak economy along with stiff competition for consumers' food dollars from cheaper pork and chicken products.

The U.S. Department of Agriculture's midday boxed beef prices Friday represented a $3.60-per-hundredweight decline in choice grade beef from the end of last week and a $1.76 loss in the select grade. These were off 2.6% for choice and 1.3% for select on the week.

Market analysts and meat/poultry brokers said packers were forced to sell beef at lower prices at midweek after product began to stack up within the plants. Prices were up slightly early in the week, but the volume of sales wasn't sufficient to clear the inventories.

They also said buying interest from grocers for shipments over the next one to two weeks wasn't brisk enough to generate much optimism from sellers for business out ahead.

Seasonally expanded hog supplies and low prices in the pork and broiler categories are limiting beef sales at the retail and wholesale levels, the analysts and brokers said.

The beef/pork spread, or difference between the USDA's choice beef and pork quotes, as of Thursday afternoon was $81.92 per hundredweight. That also put the choice beef carcass price at 2 1/2 times the pork carcass value.

Analysts said the lower price points offered by pork and chicken are causing budget-minded shoppers to take advantage of the bargains, resulting in slowed sales of beef.

Seasonally larger hog slaughters and heavier carcass weights are adding to the tonnage of pork available as well. The USDA reported record-large pork production in August, and some analysts predict that September output was also a new record.

Chicken production is down from a year ago and has been throughout the year, but prices have been under some pressure from smaller exports and the weak economy, which has negatively affected food-service sales especially.

Cattle/Hog Slaughters


This week's cattle slaughter was estimated at 635,000 head, compared with 650,000 a week ago and 635,000 a year ago. Year-to-date cattle slaughter is down 4.7% from a year ago.

The week's hog slaughter estimate was 2.329 million head, compared with 2.346 million a week ago and 2.327 million a year ago. For the year, hog slaughter is off 3.1%.

Total Meat Production

The USDA estimated total beef, pork and lamb production for the week at 979.7 million pounds. Last week's output was 991.3 million pounds, and the year-ago figure was 972.6 million pounds. Year-to-date combined meat output is down 2.9%.

Broiler/fryer slaughter for the week was estimated at 161.207 million head, compared with 160.363 million a week ago and 164.393 million a year ago.

-By Curt Thacker, Dow Jones Newswires; 913-322-5178; curt.thacker@dowjones.com