Tue, Jul 04, 2017 - Page 10 News List

US hamburger costs hit three-year low


With beef this cheap for the Fourth of July, you might as well invite the whole neighborhood over for burgers.

Thanks to a boom in supply, US retail-beef prices are low enough to compete with pork and poultry.

Americans spent US$803 million on beef, the most popular US Independence Day meat, in the two weeks near the Fourth of July holiday last summer, a Nielson report shows.

The celebration is the nation’s top grilling day of the year, with 87 percent of consumers expected to barbecue, according to Weber-Stephens Products LLC.

US beef production is rising for a second straight year, helping to boost meat and poultry output to the highest ever.

While wholesale prices have fluctuated this year, ground beef at the grocery store remains near the cheapest since 2014. And hedge funds are signaling they expect prices will remain low. They have cut their wagers on a rally for cattle futures to the smallest in 11 weeks.

Bigger supplies are “a big part of beef prices,” David Anderson, a livestock economist at Texas A&M University in College Station. “And here we are at the holiday, so go grill something. I have some steaks that look really good in the freezer.”

On the Chicago Mercantile Exchange, cattle futures for next month’s delivery fell 4.4 percent last month to US$1.163 a pound (0.45kg). That was the third loss in four months for the most-active contract. Futures are little changed this year.

The cattle net-long position, or the difference between bets on a price increase and wagers on a decline, dropped 5 percent to 125,185 futures and options in the week that ended on Tuesday last week, according to US Commodity Futures and Trading Commission data released three days later. That was the lowest since April 11.

US beef production is expected to climb 4 percent this year to 26.292 billion pounds, the highest since 2010, the US Department of Agriculture estimates.

The gain comes as feed has stayed cheap for livestock producers, with corn futures falling for four straight years through last year. Pork and chicken output will both reach records.

Higher output is helping to keep ground-beef prices low at the grocery store.

Retail costs have stayed cheap even as wholesale costs climbed, signaling that consumers will likely enjoy lower bills for the next year and a half as production keeps expanding, said Chris Hurt, a professor of agricultural economics at Purdue University in West Lafayette, Indiana.

Wholesale beef is up 11 percent this year to US$2.2473 a pound.

By contrast, retail ground beef is unchanged since the end of last year at US$3.559 a pound as of May, down 4.3 percent from 12 months ago, US Bureau of Labor Statistics data show.

Prices reached US$3.547 in April, the lowest since January 2014.

The growth in domestic and foreign demand may help to boost cattle futures later this year, according to Societe Generale SA.

The bank forecasts prices to average US$1.30 in the third quarter and US$1.25 in the fourth, compared with Friday’s close at US$1.163.

Still, holiday revelers will not have to worry about finding beef deals this week. Another boon for consumers: other staple items are also cheaper for barbecues. Pork chops, ice cream, white bread and chips are all down from this time last year.

At the average 10-person cookout, it will cost just US$5.70 per head, down about 1 percent from last year, according to the American Farm Bureau Federation.

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