Ag News

FEEDSTUFFS MEAT PRICE OUTLOOK: August 29, 2017

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Beef: Another week of declining cattle costs helped sustain the aggressive slaughter pace, with last week’s kill estimated at 639,000 head, exceeding the 634,000 head slaughtered during the prior week but well above the 610,000 head of a year ago. This week’s slaughter is expected to continue holding near 638,000-640,000 head as a weaker cash trade continues to outstrip the slide in beef prices. Cattle slaughter following the holiday-shortened Labor Day week, which is expected to be near 550,000 head, may ease modestly from the aggressive pace seen throughout the summer months, ranging in the mid- to lower 630,000-head area. Weekly steer and heifer slaughter has been ranging mostly in the range of 510,000-515,000 head and may ease back towards 500,000-510,000 head by mid-fall as cow slaughter increases seasonally. Cow slaughter is trending seasonally higher, increasing from the range of 105,000-110,000 head throughout the summer towards 110,00-115,000 head recently. Further seasonal increases towards the 120,000-head range are expected into November.

Pork: Cold storage numbers released for July revealed that stock levels are as expected. July is not normally a month when product goes in to rotation but is aggressively pulled out for supply continuity. This year was no different. Total stocks were 556 million lb., 5% below last year — widening the gap from May and June — and were down 42 million lb. from 2016. The year has trended well below last year, with major items that come out of the rotation being the ribs, the bellies and the trimmings. This year has moved in traditional fashion for the last three months, but from non-traditional levels. These levels created a significant demand on fresh product, with the effects on price now likely over as seasonal low levels should be over.

Poultry: This week, the U.S. Department of Agriculture released the “Chicken & Eggs” report, which showed broiler-type egg layers on Aug. 1 at a total of 56.9 million. While that number was down slightly from the 57.1 million on hand on July 1, the reduction in layers from July to August is typically closer to 0.5%. The amount of broiler-type hatching egg layers on Aug. 1, at 56.9 million, was 4.5% larger than during the same time a year ago. Productivity is still lagging behind year-ago numbers, as broiler chicks hatched per layer for the month averaged 14.5 during July. That number was up from the previous report but still was 2.4% lower than both the 14.9 chicks per layer during the previous July and the five-year average (2012-16) for July. The outlook is for chicks hatched per layer during the month to average 14.5 during the third quarter and 14.3 during the fourth quarter. The risk is to the upside as new breeds of layer hens are introduced to the current flock.

For a more detailed look at the weekly forecasts for the various meat sectors and meat cuts, subscribe to the “Meat Price Outlook.” Contact Susan Dahlgren at [email protected] for more information.

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