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CME: December Red Meat, Poultry Production Virtually Unchanged

28 January 2013

US - The December editions of USDA’s Livestock Slaughter and Poultry Slaughter reports were released and they provide our first official estimates of total 2012 slaughter for all species, write Steve Meyer and Len Steiner.

The data appear in the table below. Since we already had monthly data for January through November and weekly data for December, there is no big shock factor for the information — just as there hardly ever is for the monthly slaughter reports. They do provide important information, however, since the daily data represent only federally-inspected slaughter and the weekly data are not easily synthesized into monthly, quarterly or even annual data. Note that there was one fewer slaughter day this December than in December 2011.

Some highlights of the report are:

  • December FI cattle slaughter of 2.5 million head was sharply lower than both last year (-7.6 per cent) and November (-8.8 per cent). December commercial slaughter — the sum of federally-inspected and other (ie. state-inspected) slaughter — were down by similar percentages.
  • 2012 commercial cattle slaughter finishes the year 3.3 per cent lower than that of 2011.
  • Commercial calf slaughter was down roughly 10 per cent for December vs. one year ago and for the year. The 759,700 calves slaughtered in 2012 is the lowest number since 2007. Lower calf slaughter is a major contributor to higher levels of beef production per cow. Nearly 4.7 million calves were slaughtered as recently as 1977 and over 7 million calves were slaughter annually on a regular basis in the 1950s. Harvesting those animals as 1200– to 1500-pound fed cattle instead of 200– to 300– pound calves is a big boost to beef output.
  • December commercial hog slaughter numbered 9.465 million head, 4.8 per cent lower than last year and 6.3 per cent lower than in November. Annual slaughter ended the year 2.1 per cent higher than last year. Those numbers were pushed higher by the surge of slaughter back in August and September. We believe that process has caused hogs to be marketed in a very timely manner the rest of 2012 and actually pulled a few hogs forward that would have normally been harvested in early January. That doesn’t mean we will see a “hole” in marketings — at least not until lower feed prices encourages feeding to higher weights or hot weather forces longer feeding periods to reach desirable market weights. Neither of those will happen soon.
  • What was once a rare occasion— a decline in broiler slaughter — has now occurred two successive years. Young chicken (ie. broiler) slaughter fell 1.3 per cent in 2012 to 8.429 billion birds. That decline follows a similar reduction in 2011. It appears that "4 per cent more broilers" is no longer as sure a bet as death and taxes.
  • Turkey slaughter grew by 1.4 per cent for the year. This increase follows a 1.7 per cent increase in 2011 and puts turkey slaughter at its highest level since 2008. Recall that the industry down-sized by over 9 per cent in 2009. We do not see that kind of draconian cut this year but it appears that the past two years’ growth will be difficult to sustain.
  • December beef production is estimated to be 2.02 billion pounds, 5 per cent lower than one year ago. That figure brings 2012 beef output to 25.912 billion pounds, down 1.1 per cent from 2011.
  • Pork output in December was 1.954 billion pounds, down 5.4 per cent from last year. Annual pork production for 2012 is pegged at 23.25 billion pounds, 2.2 per cent larger than one year ago.
  • Total "red" meat production, which includes 118 million pounds of veal and 156.2 million pounds of lamb/mutton, was 49.436 billion pounds in 2012. That figure is virtually unchanged from one year earlier.
  • Broiler output in December amounted to 2.853 billion pounds, ready-to-cook (RTC) weight. That figure is virtually identical to one year ago. It brings annual production to 37.035 billion pounds, RTC weight, 0.4 per cent lower than last year.
  • Turkey production in December was 4 per cent smaller than last year. Annual turkey production of 5.935 billion lbs, RTC was up 3 per cent.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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