NO ENCOURAGING WORD ON BEEF PRICE RANGE

PAMELA BLAMEY

Retailers seem to agree with meat industry and U.S. Department of Agriculture survey reports that there is little hope for reprieve from falling beef prices.

During the month of May, price features across the country showed deep discounts, with points as low as $1.39 per pound for USDA Choice boneless chuck roast (Quality Food Centers in Seattle); $1.97 per pound for boneless USDA select sirloin steaks (H-E-B Pantry Foods, Houston), and $1.98 per pound for USDA choice boneless top round London Broil or steak (A&P Food Market, Atlanta).

In a 19-city survey, the National Cattlemen's Association, Englewood, Colo., reported that the average retail price of beef declined during the month of May, with ground beef at $1.52 for regular, $2 for lean.

Retailers said it continues to be a bitter-sweet phenomenon. "The tonnage is up on beef sales in general, because it's so cheap," reported Russell Kates, co-owner of Steele's Markets in Fort Collins, Colo. "But the dollars are down -- we're selling more and making less.

"I was looking at prices yesterday, and we can pick up coarse grind for 69 cents a pound. We can sell ground beef for 89 cents, we can run chuck steaks for 89 cents. Sirloin steak this week is going for $1.99.

"It's a supply and demand thing -- producers are having a fire sale."

But Kates is taking advantage of the situation. "I don't expect prices will stay down there, but I can't say that low prices are bad, because a lot of people who are out of the habit [of buying beef] are getting into the habit again, and this way maybe they'll stay in the habit when prices start to improve."

Wally Bilius, director of meat operations at Seaway Food Town in Maumee, Ohio, concurred.

"[Low wholesale prices] offer us the possibility of doing nice retail and sale features [with beef]," he told SN.

"If you want a product to really drive [sales] at the front end, beef will do it. It still produces the tonnage -- there's no question about that.

"I will do twice the amount of tonnage of beef on a feature that a poultry or pork feature will."

While Bilius said it is true that outer cuts such as chuck and round are available to him at lower prices than last year, inner meats such as rib and loin are "just a hair higher than last year, so we are not able to offer as hot prices as we could last year."

Last year, for example, Bilius ran a sale on T-bone steak for $2.99. "This year I have to do it at $3.99 or we will lose money."

Jeff Farnsworth, director of meat operations at Copps Corp. in Stevens Point, Wis., was cautious about predicting price trends. "I don't really see how we can see any major improvement on price until at least September, and then you're going to see the product mix changing anyway.

"There's not a lot of downside risk now -- things are cheap! We're seeing some movement on middle meats, which is seasonal, but rounds and chucks are in the toilet," said Farnsworth.

"Since beef prices are so low, we've come down on both regular and [feature] prices," said Clary Day, director of meat operations at Jitney Jungle in Jackson, Miss.

"We're selling 9% or 10% more beef," he said. "We're probably moving around 20% to 22% on price features."

Day said the chain has recently run specials on ground beef for 69 cents per pound, boneless chuck roast at 95 cents and 97 cents per pound and ground chuck at 97 cents per pound.

Retail Prices for Beef (in cents per pound)

April 1994 April 1995

Beef- Choice 287.1 283.7

Beef - All Fresh 267.3 259.5

Ground Beef 148.2 136.5

Rib Roast 469.3 493.7