U. S. Beef Packers’ Losses Seen Reversing Late Oct.

U. S. beef packers have not slowed their pace of slaughter, despite negative profit margins for as long as three weeks, in a possible sign that a turnaround is at hand later this month, livestock analysts said.

The analysts said demand was expected to pick up in late October and continue through end of the year, when demand, both domestic and overseas, picks up during the holiday season.

“I think we are fairly close to a turnaround as we should see increased export pricing for the holidays and also domestic pricing should begin for middle meats for the holiday period,” said analyst Andy Gottschalk of market research company HedgersEdge.com.

Beef packer margins – which had been positive most of August and early September – slipped into the red when beef prices fell amid a slowdown in demand after the Labour Day holiday, which marks the end of the summer grilling season.

The wholesale price of choice grade boxed beef has slipped to $151.86 per cwt, after peaking at $164.30 in late August.

HedgersEdge.com reported

that margins turned negative Sept. 20, after being positive for 29 days.

Some analysts said HedgersEdge.com’s margin declines were too steep, and that packers had been losing money for only the past week.

Packers have kept the pace of cattle slaughter fairly steady, which also leads analysts to believe the packers have not been in the red as long as three weeks.

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