Demand for beef has, at last, seen a seasonal pick-up ahead of the traditional start date for the US barbecue season, although analysts expressed doubts about the longevity of the rebound, and its impact on cattle futures.
Protein giant Tyson Foods said that sales of beef, chicken and pork had improved over the past two weeks, helped by warmer temperatures.
"We are happy with the improvement in demand we've seen following a cold, wet April," Donnie Smith, the Tyson chief executive, told investors.
"Demand feels pretty good for two weeks after Easter," he said, while adding that it was "not hardly where we wanted it to be two weeks before Memorial Day".
The US Memorial Day holiday, which this year falls on May 30, is typically viewed as the start of the barbecue season, and a period of higher demand for grilling cuts of meat.
The comments followed official data showing a steep rise in wholesale US beef prices on Monday, notably for the higher-quality choice cuts, which rose by an average of $2.73 per hundredweight to $177.52 per per hundredweight.
"Boxed beef values were sharply higher," US Commodities said, adding that beef sales had, according to weekly data, risen to their largest since October.
"The packers are now buying for the Memorial Day holiday."
'Demand could suffer'
Nonetheless, prices for choice beef remain nearly $10 a hundredweight lower than a month ago, and demand could yet soften again if fragile consumer demand is damaged again, US Department of Agriculture analyst Rachel Johnson said.
"If fuel prices increase much above current levels, household budgets are likely to be re-evaluated," she said.
"Demand for high-priced meat cuts could suffer as a result."
And US Commodities said that, with beef supplies set to be boosted over the summer as a knock-on of higher placements of animals on feedlots, it "remains negative throughout the summer" on live cattle prices.
Live cattle futures extended their slide on Tuesday, with Chicago's near-term June lot falling
Tyson also highlighted in its comments to the BMO Farm to Market conference support from strong US meat exports which, for beef, soared 32% in the first quarter of the year, official data show.
"Exports, along with production efficiencies and value-added programmes, are driving our earnings," the group's fresh meats boss, Noel White, said.
US exports to Japan and Hong Kong rose more than 60% year on year during the quarter, with shipments soaring 194% to South Korea, whose own livestock industry has been devastated by foot-and-mouth disease.
Ms Johnson forecast that the rise in shipments would slow to 11% in the second quarter, and turn negative in the last three months of 2011, as supplies tighten again.
Tyson shares stood 0.4% lower at $18.44 in midday trade in New York.
In Chicago, live cattle for June stood 1.2% lower at 107.025 cents a pound, down 13% from the record high for a spot contract of 122.875 cents a pound reached early last month.
See the original article >>