U.S. economy slump erodes beef trade

by Editor fleischwirtschaft.com
Tuesday, October 07, 2008

The U.S. economy has been through a turbulent week with large losses in the financial and equity markets, which have flowed on to hit the beef trade, according to Meat and Livestock Australia. It says the flow-on effect to the U.S. imported beef market was witnessed in trading volumes, which remained light during the week, due to the presence of more sellers than buyers.

MLA reports that this saw prices trend lower, with many participants of the view that buyers will continue to trade on an immediate needs basis, as uncertainty remains about how household consumption habits will respond in coming months.

There are some traders, though, who believe that the recent turn of events will favour demand for lower value meat products such as hamburgers, indicating the downturn in the market is only temporary.

Much of the focus in the U.S. beef market has been on the CME live cattle futures market which took a battering during the week as buyers pulled back on activity, due to the downturn in the economy.

Reduced activity is partly attributed to weak demand in the foodservice sector and lower prices of competing meats.