Prices on 50 percent lean beef trimmings rebound
By CAROL RYAN DUMAS
The price of 50 percent lean beef trimmings is approaching $1 a pound after having plummeted by nearly half that in the "pink slime" fallout in the spring of 2012.
The trimmings were largely used to extract lean finely textured beef (LFTB) from fat to add to leaner ground beef to make hamburger at a specific leanness.
Food activists and some media condemned the use of the product in ground beef, using the unsavory term "pink slime" to describe it. The issue went viral, collapsing demand and prices for the product and causing one LFTB manufacturer to close three plants.
Prices for fresh 50 percent lean trimmings bottomed out at about 43 cents per pound in late summer 2012, but have rebounded to about 98 cents per pound.
While there is less consumer push-back now on LFTB, that is not the reason for the price recovery, said Jim Robb, director of the Livestock Marketing Information Center.
There are several reasons for the recovery, but the main one is that packers responded to the reality that a valuable product lost value and they adjusted accordingly, he said.
"It's a classic case of industry changing and adapting to a shocking incident, which was the lean finely textured beef debacle just about one year ago," he said.
Instead of selling the trimmings to an LFTB manufacturer, packers put more of it into their products, such as hamburger, hotdogs and sausage, he said.
Some packers have added lines to hand cut, further trim and sort what was formerly going direct to LFTB firms, and there appears to be more grinding in-house, he said.
Another reason is slaughter of fed steers and heifers, which account for the 50 percent lean trimmings, has been slightly lower this year while slaughter of cull cows, which account for leaner, 90 percent lean trimmings, has been higher.
As a result there are less 50 percent trimmings and more 90 percent trimmings from U.S. slaughter, he said.
Ground meat processors use a mix of those trimmings added to ground lean whole cuts of beef to arrive at the desired leanness -- 80 percent to 90 percent lean.
In addition, much of the 50 percent trimmings in the U.S. are imported from Canada, and that has slowed, while imports of lean beef from Australia, New Zealand and South America headed for U.S. grinders has increased, he said.
Tight supplies of the more fatty trimmings, increased U.S. cow slaughter, increased lean imports, and good demand for hamburger have all helped to push prices higher for 50 percent trimmings, he said.
"It's taken about a year for the industry to regain footing," he said.
But markets work, and the price recovery is indicative of supply and demand, he said.