| CHICAGO, March 20
CHICAGO, March 20 Persistently cold weather and
snowfall on the first day of spring have crimped demand for
high-quality cuts of beef in the United States at a time of year
that typically sees increased purchases for so-called grilling
season, analysts and traders said on Wednesday.
In a rare move, wholesale prices for choice-grade beef
dipped below those of leaner but lesser-quality select cuts,
according to the U.S. Agriculture Department.
The wholesale choice beef cutout declined to $192.94 per
cwt, the lowest level since the first day of the month, while
select beef was priced at $193.21.
"We need some nice grilling weather, some spring weather
that facilitates the scraping off of backyard barbecues.
Grilling season is an important turning point (in beef demand)
and it's certainly delayed this year," said Jim Robb, economist
at the Livestock Marketing Information Center.
Late-winter snowfall on the East Coast and below-freezing
temperatures on the Spring Equinox in the Midwest contributed to
a slow start to the grilling season while an early Easter
holiday also limited buying during Lent, when many Christians
eat less meat.
Beef prices remain near record highs after ranchers culled
the U.S. cattle herd to the smallest in 60 years when last
summer's devastating drought sent animal feed prices soaring.
And the high cost of beef - retail prices hit a record of
$5.24 per lb in January - may lead to more consumers grilling
chicken or pork this summer while grocery stores give more
advertising space to cuts with a better chance of selling.
Rising gasoline prices and the expiration of a payroll tax
break are also keeping a lid on U.S. discretionary spending.
Top U.S. meat company Tyson Foods Inc late last
month said margins were "compressed" this year in its beef
"With cheaper pork and broiler meat around, the retailers
are likely to go away from beef. Beef is priced out," said John
Ginzel, an analyst at brokerage The Linn Group in Chicago.
Choice beef was priced 27 cents per cwt below select and
discounted for the first time since April and only the 14th time
in history, USDA data shows.
The inversion of the choice-select spread is rare and
self-correcting because retailers snatch up the higher quality
and yet less expensive choice product.
Choice beef has more "marble," or fat, that many cooks sear
on hot grills to lock in juicy flavor while select is leaner and
Winter storms early this month in the southern U.S. Plains
cattle country also slowed the marketing of slaughter-ready
animals, resulting in further weight gain at feedlots. That may
have also resulted in more beef being graded as choice, the