By Meatingplace Editors on 9/9/2011

Grocers may move less beef in the coming weeks after favoring pork in promotions, which could also lead to softer beef pricing, research by Deutsche Bank suggests.

Beef took a backseat to pork in food retailers’ Labor Day promotions. Beef was featured in 27 percent of advertisements compared to 29 percent for pork and 19 percent for chicken, according to the bank’s survey of about 700 national supermarket circulars.

Similar promotional activity over Memorial Day weekend preceded a softening in beef prices, Deutsche Bank analyst Christina McGlone wrote in a note to clients.

“We recall Memorial Day was characterized as disappointing,” she said, “and with feature activity approximating the same level, we may see Labor Day beef disappearance disappoint as well. “

Across brands, the survey found Sara Lee and Johnsonville stepped up their promotional activity while Kraft and Tyson ran fewer promotions.

Has pork peaked?

While beef prices have remained historically high, pork prices likely peaked in August, McGlone said.

Pork prices reached record prices in August, averaging $110 per hundredweight during the week of Aug. 12, compared with the historical average of $72 per hundredweight in that month, McGlone said. Pork prices have since softened due to a seasonal increase in hog availability, higher weights and a potential slowdown in export demand.

Chicken still struggling

Chicken prices remain weak, and promotions were also scaled back, McGlone said. With no relief in feed costs likely, another round of production cuts could occur in October or November, she predicted.

“With debt covenant renegotiations likely exhausted, the chicken industry has no choice but to embark on a new round of cuts,” McGlone wrote in her report.