(Corrects day to Tuesday from Monday in first paragraph)
* Approach of grilling season boosts beef to record
* Late arrival of warm weather improves mood for grilling
* Beef prices may be near a peak - analysts
By Sam Nelson
CHICAGO, May 14 A turn to warmer weather in the
United States and pent up demand for steaks and burgers ahead of
the traditional grilling season sent wholesale prices for
choice-grade beef to a record high of $205.91 per hundredweight
on Tuesday, up 36 cents from the previous record set late last
Beef prices normally rise in the spring but this year's
smaller beef supply coupled with the late arrival of warm spring
cookout weather, triggered a strong increase in the beef market,
analysts and traders said.
"Beef is seasonally strong this time of year. It usually
tops out about now but what is different this year from past
years is the beef supply is lower, so there is some question if
the top is in," said Don Roose, president of U.S. Commodities,
Des Moines, Iowa.
The cold soggy start to spring put outdoor cookouts on hold
throughout most of April and early May, but with forecasts for
more typical spring weather this week, grocers stocked up for a
seasonal bump in sales of steaks and ground beef.
"The seasonal demand is here, the warmer weather and the
grilling season most definitely is helping," said Dennis Smith a
broker for Archer Financial.
Chicago Mercantile Exchange (CME) live cattle futures were
lower in most contracts despite the record high beef price, as
the higher beef market had been anticipated. The spot June
cattle held firm due to the pressing demand for beef to
meet the improved cookout atmosphere.
"Some of them are thinking beef may be topping out at $206
and we're just barely under that so that is why you're seeing a
selloff in futures," Roose said.
Demand for beef traditionally escalates just ahead of the
annual U.S. Memorial Day holiday, which is May 27 this year.
National Cattlemen's Beef Association (NCBA) weekly retail
scanner data shows Memorial Day ranks third in weekly holiday
beef retail sales at about $370 million, behind U.S. Labor Day
sales of $380 million. The U.S. July Fourth holiday is No. 1 at
around $400 million.
The high price for beef has led some analysts to forecast a
drop in demand soon as consumers shift to lower-priced pork and
But for now the beef market keeps climbing.
"A lot of people thought $205 might be the top but we've
gone through that so there's no indication the top is in, it
looks like we'll go even higher," Smith said.
The record-high wholesale beef prices likely will increase
grocery store beef prices, which are already at lofty levels,
The average retail beef price in March hit a record $5.30
per lb, surpassing the previous record of $5.15 in November,
according to the government's Economic Research Service.
(Addititional reporting by Theopolis Waters and Michael Hirtzer
in Chicago; Editing by Bob Burgdorfer)