U.S. 'select' beef price hits record as storms slow shipments
CHICAGO Jan 8 (Reuters) - Prices for select-grade U.S. wholesale beef hit a record-high on Wednesday for the fourth straight day, as shipments of the meat slowed after a historic winter storm in the United States prompted a surge in live cattle prices, analysts said.
Higher-quality "choice" beef prices also climbed, rising to the loftiest levels since hitting an all-time high in May, 2013, U.S. Agriculture Department data showed.
"Supplies are tight and demand is relatively strong," said Dan Vaught, economist with Doane Advisory Services in St. Louis.
Heavy snowfall and the coldest temperatures on record in some parts of the United States this week slowed the transportation of cattle to slaughter houses and shipments of beef to retailers.
USDA pegged the select cutout at $207.07 per cwt, up $3.51 from Tuesday. The value was more than $10 above what had been the previous record set in March of last year, lifted by gains chuck and round beef cuts.
Select beef typically has less "marbling" or fat and can come from younger cattle. The leaner select beef is considered less flavorful and not as tender as choice-grade beef.
The choice cutout was $210.13 per cwt, up $2.82 and just below the all-time high of $211.37 set on May 23.
The U.S. cattle herd is the smallest in about 60 years, forcing beef packers such as Tyson Foods Inc and Cargill Inc last week to pay feedlots in the southern U.S. Plains as much as $138 per cwt for live cattle, a record price.
"You have to have good wholesale prices to justify paying up to $138 for cattle," Vaught added.
USDA estimated that 332,000 head of cattle were slaughtered so far this week, down about 12 percent from the same period last year.
"Kills have been lighter. That, in my mind, gives the packer more room to offer the product higher," said Elaine Johnson, an analyst at CattleHedging.com.
Retail beef prices jumped to a record $5.41 per lb in November after ranchers thinned their herds. Consumer demand for the beef has declined for several decades as buyers turned to cheaper chicken. USDA will update retail meat values in a monthly report due next week.
USDA also adjusted the way it calculates specific cuts within the cutout, likely contributing to the recent gains, the analysts said.