US HAM PRICES MAY HIT SEASONAL PEAK EARLY

US HAM PRICES MAY HIT SEASONAL PEAK EARLY

Ham prices, which have been rising since January, could be nearing an earlier-than-expected seasonal peak as U.S. retailers finish stocking up for Easter.

Multiyear charts suggest wholesale ham markets tend to peak about a month before the Easter holiday.But this year, wholesale ham prices could hit a top within the next two weeks, although Easter will be observed later this year, on April 19.

The U.S. Department of Agriculture reported skinned ham prices Tuesday at $62.50 a hundredweight, compared with the seasonal peak of $78 on Feb. 19, 1991, when Easter was observed earlier.

Prices have been going up this year because of increased demand from retailers booking supplies for the Easter holiday, trade sources said.

All retail buyers contacted said they were putting away extra hams for the holiday now. Prices have been rising since Jan. 22, when the USDA quoted hams at $53, the lowest price so far this year.

A ham buyer for a major Midwestern supermarket chain said prices could be near a top now.

The buyer said although retailers have not finished their holiday purchases, increased hog supplies and more hams in storage would dampen price

gains in hams further.

Extra slaughterings mean more hams are being offered to the market, which could keep pressure on prices, said Chris Hurt, an agricultural economist at Purdue University.

For the week ended Feb. 1, the latest week available, packing plants slaughtered 1.8 million hogs, compared with 1.6 million during the same week a year ago, according to USDA figures. Slaughter rates have been running above year-earlier levels since March 1991.

For the week ended Saturday, the USDA estimated year-to-date hog slaughterings at 11.8 million head, up 5.9 percent from a year ago.

Forecasts for large hog slaughterings to continue may have encouraged some buyers to think there'll be plenty of hams available, Mr. Hurt said. Keeping a close watch on inventories also cuts storage costs.

Many retail buyers also said the Easter holiday no longer has the influence on ham prices it did many years ago.

Supermarkets that once planned to sell enough Easter hams to equal 80 percent of their sales at Christmas now expect to sell 60 percent, the Midwestern pork buyer said.

People have de-emphasized Easter holiday celebrations in recent years, the Midwestern buyer said. For instance, Palm Sunday, the Sunday before Easter, no longer is a prominent time of family gatherings for traditional meals.

That reduces Easter celebrations to one day, which cuts into the number of hams consumers purchase at this time of the year, the buyer said.

However, Joe Kropf, senior commodity analyst for Bill Helming Consulting Services, said the week of March 15 could be when ham prices reach their near- term top. He predicted ham prices would peak seasonally at $65 to $70.

A survey of ham prices back through 1980, when correlated with the dates on which Easter fell each year, showed prices peaked about one month before the holiday, Mr. Kropf said.

Each year, retailers say Easter hams are not as important to consumers as they once were, but hams continue to be featured for the holiday.

Many still could have a few extra loads to purchase before Easter, Mr. Kropf said.

Booked inventories also may not be as large as in other years because retailers hope prices will decline to allow some profitable late purchases.