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Price for U.S. beef trimmings hits record high

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The price that the U.S. Department of Agriculture quoted for 65 per cent lean beef trimmings, used to make sausage and hamburgers, hit an all-time high Sept. 5, industry sources said.

Roughly 462,250 lbs. of fresh 65 per cent lean trimmings, which is blended with 35 per cent fat to reach 100 per cent consistency, hit an average price of $147.86 per hundredweight (cwt), according to USDA data.

That price surpassed the previous record of $145.67 on Dec. 6, 2011.

The government said the country’s supply of beef trimmings overall was lower amid light demand.

The 65 per cent lean trimmings market typically is not a “big” traded item, said Livestock Marketing Information Center director Jim Robb. The 50 and 90 per cent trimmings are what drive the market and those prices are not at record highs, he said.

John Ginzel, analyst with Linn Group said: “One has to be careful how the data is interpreted.”

More than one day is needed to validate whether that price is just a few loads changing hands between a few people in the industry or signs of an active broader trend underway, he said.

Ground beef costs at wholesale typically come down after the U.S. Sept. 2 Labour Day holiday, which is the unofficial end of the summer grilling season.

However, prices for ground beef have not declined as much as some had expected, possibly due to better hamburger demand, said Ginzel.

Tighter cattle supplies may have also influenced demand, he said.

Last summer’s historic drought in the Midwest, and prolonged dryness in the U.S. southwest, hurt crops. That drove feed costs to record highs, reducing the U.S. cattle herd to its smallest in 61 years.

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